These are formally called “International Commercial Terms” and were amended in 2000. Hence now it’s called Incoterms 2000.

These are 14 different types of standard types of contracts. These are followed all over the world and provide the basis on which transaction is done between exporter and importer.

There are 4 groups in which these terms have been categorized.

• Ex Works:

Price is quoted on Ex-works basis. It means that the liability and risk of the exporter ends in its warehouse only. The importer has to bear all the costs and bear all the risks involved in transporting from exporters’ warehouse to its own works.

• F Series:

FCA: Free Carrier Alongside. Under this term, the exporter delivers the goods at a designated place close to the carrier. Exporter bears the responsibility to deliver the goods to predestinated place close to the ship, and the importer has to pick it up from there. It is mainly used in case of air shipments.

FOB: Free On Board. Under this term, the exporter delivers the goods on board the carrier. The importer bears the rest of the responsibility. Mainly used in the case of ocean shipment.

• C Series:

CFR: Cost and Freight. Under this term, the exporter pays the freight till the destination port. Insurance is paid by the importer.

CIF: Cost Insurance and Freight. Under this term, the exporter delivers the goods to the destination port. It means that, freight and marine insurance will also be paid by the exporter.

• D Series:

DDU: Delivered Duty Unpaid. Under this term, the exporter delivers the goods in the warehouse of the importer but doesn’t pay the import duty, if any. Entire responsibility of carriage of goods lies with the exporter.

DDP: Delivered Duty Paid. Under this term, the exporter delivers the goods in the warehouse of the importer and also pays the import duty, if any.