INCOTERMS are a set of uniform rules that define the trade terms in international arena. These define the rights and obligations of parties involved in an international transaction.
The INCOTERMS are drafted and published by ICC (International Chamber of Commerce)
INCOTERMS do not cover ownership or the transfer of title of goods. It is crucial to agree on the INCOTERMS at the start of the negotiation between the buyer and seller, as it affects the costs and responsibilities involved in shipping, insurance and tariffs.
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Following, are the standard INCOTERMS 2010 :
The seller fulfills his obligation to deliver by making the goods available for
transportation at his premises (Factory, Warehouse, Works etc). Generally, the seller
is not responsible for loading the goods in the carrier provided by the buyer or
for clearing the goods for export purposes, unless otherwise agreed. Thus, the buyer
bears all the risks and costs from taking the goods from the seller's premises to
the desired final destination.
The seller fulfills his obligation to deliver when he hands over the cleared goods
into the charge of the carrier at the nominated place by the buyer. If no precise
place has been mentioned, the buyer hands over the goods at the place where the
carrier accepts the goods and takes the charge of the same.
The seller fulfills his obligation to deliver when the goods have been placed alongside
the vessel on the quay at the named port of the shipment. The buyer has to bear
all costs and risks involved from that moment onwards.
The seller fulfills his obligation to deliver when the goods have been placed over
the Ship's rail at the named port of the shipment. The buyer has to bear all costs
and risks involved from that point onwards. The seller is required to clear the
goods for export.
The seller pays for the costs and freight to transport the goods to the named port
of destination. All costs and risks involved after the delivery of goods on the
vessel, is transferred from the seller to the buyer when the goods pass the Ship's
rail in the port of the shipment. The seller is required to clear the goods for
export.
In addition to the obligations under CFR, the seller has to procure the marine insurance
against the buyer's risk of loss or damage to the goods under carriage. Thus, the
seller contracts for insurance and pays the insurance premium.
The seller pays for the costs and freight to transport the goods to the named port
of destination. All costs and risks involved after the delivery of goods to the
carrier, is transferred from the seller to the buyer when the goods have been delivered
into the custody of the carrier. If subsequent carriers are involved, the risk passes
when the goods have been delivered to the first carrier. The seller is required
to clear the goods for export.
In addition to the obligations under CPT, the seller has to procure the marine insurance
against the buyer's risk of loss or damage to the goods under carriage. Thus, the
seller contracts for insurance and pays the insurance premium but is required to
obtain insurance under minimum coverage.
The seller pays all costs and freight until the goods are unloaded at the named
terminal in the country of importation and placed them at the disposal of the buyer.
The seller has the responsibility to clear the goods for export, but does not have
the obligation to deal with import duties or other formalities.
The seller fulfills his obligation to deliver when the goods have been made available
to the buyer at the named place in the country of importation; the unloading of
goods from the carrier is the responsibility of the buyer. The seller has the responsibility
to clear the goods for export, but is not responsible for import clearance.
The seller fulfills his obligation to deliver when the goods have been made available
to the buyer at the named place in the country of importation. The seller has to
bear all costs and risks involved in delivering the goods thereto including duties
and taxes and other official charges payable upon importation. Whilst the EXW term
represents the minimum obligation for the seller, DDP represents the maximum obligation.