When you receive a proforma invoice from an Indian granite exporter, two terms appear most frequently: FOB and CIF. Understanding the difference between these Incoterms is not just important — it directly affects your total landed cost, your risk exposure and your insurance obligations.
What Does FOB Mean?
FOB stands for Free On Board. Under FOB terms, the seller (exporter) is responsible for all costs and risks until the granite is loaded onto the vessel at the named port of shipment. Once the goods pass the ship's rail, all costs and risks transfer to the buyer (importer).
What Does CIF Mean?
CIF stands for Cost, Insurance and Freight. Under CIF terms, the seller covers everything included in FOB, plus ocean freight and marine insurance to the named destination port. The risk still transfers at the port of origin (when loaded), but the seller pays for the freight and insurance.
FOB vs CIF: Cost Comparison
| Cost Element | FOB — Paid By | CIF — Paid By |
|---|---|---|
| Factory packing | Seller | Seller |
| Inland transport to port | Seller | Seller |
| Origin port charges | Seller | Seller |
| Loading onto vessel | Seller | Seller |
| Ocean freight | Buyer | Seller |
| Marine insurance | Buyer | Seller |
| Destination port charges | Buyer | Buyer |
| Import customs & duties | Buyer | Buyer |
| Onward delivery | Buyer | Buyer |
When Should You Choose FOB?
- You have an established relationship with a freight forwarder who can negotiate better ocean rates than the exporter
- You are importing large volumes regularly and can consolidate freight costs
- You want full control over your freight arrangements and insurance terms
- You are experienced in granite import logistics
- Your freight forwarder operates at the Indian origin ports
When Should You Choose CIF?
- You are importing granite for the first time and want a simple, all-inclusive price
- You want to compare total delivered prices from multiple exporters easily
- You don't have existing freight forwarder relationships at Indian ports
- You are sourcing smaller quantities where freight negotiation offers little advantage
- You want the exporter to take responsibility for transit risks
Important Note on Risk Transfer
Under both FOB and CIF, the risk transfers to the buyer when the goods are loaded at the origin port. This means that even under CIF, if granite is damaged during the ocean voyage, you (the buyer) file the insurance claim — though the seller has purchased the insurance on your behalf. Always confirm the insurance coverage terms and ensure minimum cover is adequate for your consignment value.
Naturaw Stones Export Terms
Naturaw Stones offers both FOB and CIF pricing to all markets. Our most common export ports are Hyderabad ICD, Chennai, Mumbai, Mundra and Vizag. We work with established freight forwarders for reliable CIF pricing to major ports in Poland, Germany, UK, UAE, Australia, Thailand and the USA.