Incoterms 2020: The 11 Rules for Importers

Three letters on a quote decide who pays for the ship, who carries the risk while it sails, and who stands in front of customs. This hub gives you all eleven Incoterms rules in one place, where risk and cost pass under each, and a plain answer to the question every buyer from India asks us: which one should I use?

Keep one story in mind while you read. In July 2024 an Amazon seller in the US posted that his container of Indian goods was being held at a US port. He'd paid, and the goods had sailed. But the Indian shipping agent his supplier had chosen hadn't paid its partner agent in the US, so the US agent kept the box (r/AmazonSeller, July 2024). A few months earlier another buyer described an Indian shipping company holding his container "as hostage" the same way (r/FreightBrokers, April 2024). One honest caveat - Incoterms don't fix a bad supplier. They only decide who holds which piece of the job, and that turns out to matter a lot.

1. The Version, Checked

The rules are Incoterms 2020, published by the International Chamber of Commerce (ICC) and in force since 1 January 2020. We checked the ICC's own pages on 25 September 2026. There is no Incoterms 2030 and no announced date for one. The ICC has revised the rules roughly once a decade since 1980, so a new edition around 2030 is a fair guess, but a guess is all it is until the ICC says otherwise.

Write the edition on every quote and contract. A contract that names a rule but no edition will most likely be read under the edition in force when it was signed, which is 2020 today and may not be later.

2. What The Rules Do, And What They Don't

The Incoterms rules split obligations, costs and risks between a seller and a buyer for the delivery of goods. Each rule says who arranges and pays for carriage, insurance, export and import clearance, and at what point the risk of loss or damage moves from seller to buyer.

They don't set the price, the payment terms, or when ownership passes. Payment is its own decision, and what each method protects is on how to pay an overseas supplier safely. They don't create a contract of carriage or an insurance contract on their own, and they don't say what happens if a party breaches the sale contract. An Incoterm is one clause, not the whole deal.

So why did the US seller's box get stuck? Not because the term was broken. Under a C or D term the seller books the freight, the seller's agent issues the bill of lading, and the agent chain runs on its own money. If one link doesn't pay the next then your goods wait, and you have no contract with any of them.

3. The Two Groups

The ICC splits the eleven rules by transport. This is one place where a table earns its keep, because you'll want to compare the rules side by side.

Any mode or modes of transport (seven rules). Use these for containers, air freight, road, rail and combinations.

Sea and inland waterway only (four rules). Use these for cargo delivered on board or alongside a ship, which means bulk and break-bulk, not containers.

4. Where Risk And Cost Pass

Read each row left to right. "Seller" means the seller pays. The last column is the point where loss or damage stops being the seller's problem.

Two things to notice. Under every C term the seller pays for the trip but the risk passes in India, which is the gap our US seller fell into: the goods were his from the moment they were loaded, yet the booking never was. And under every term except DPU, unloading at your end is yours.

When the box changes ship on the way

The rules say nothing about transhipment, which is when your container is moved from one ship to another at a hub port. Whether that's allowed belongs in the sales contract, and in the letter of credit if you pay by one. But the table above decides who carries the hub. Many India lanes change ship on the way: every Australia and New Zealand sailing we read went via Singapore, Port Klang, Colombo or Tanjung Pelepas (sea freight routes). Under FOB, FCA, CFR, CIF, CPT and CIP the risk is already yours in India, so a missed connection or damage at the hub is your delay and your insurance claim. Under DAP, DPU and DDP it stays with the seller until the named place. If your lane transships, ask the forwarder to name the hub before you agree the term, and make sure your cargo insurance covers the whole trip.

5. What Changed In 2020

If you still hold a 2010 chart, four things moved. DAT became DPU, with the place no longer limited to a terminal. CIP's required insurance rose to Institute Cargo Clauses A, while CIF stayed at Clauses C. FCA gained an option for the buyer to tell the carrier to issue an on-board bill of lading to the seller, which helps with letters of credit. And the rules now spell out security-related obligations for each term.

6. The Retired Terms You'll Still See

Five terms still turn up on quotes and are no longer rules. DDU, DAF, DES and DEQ were dropped in the 2010 edition, and DAT was renamed DPU in 2020. We cover them because Indian forwarders, courier desks and old templates still use them, and each page says what the term meant, what replaced it and what to write back.

7. Which Term Should You Use When Buying From India?

Our answer is short - FOB or FCA, named to a port or depot, with your own forwarder. That is the fix for the held container. If your forwarder books the freight then its agent at destination answers to you, and there's no Indian agent in the middle with a bill to settle.

If you ship containers and have a forwarder, ask for FCA at the depot or the port CFS, or FOB at the port if the supplier won't quote FCA. Both put export clearance on the seller, where Indian rules require it, and put the freight booking in your hands. The difference is where risk passes: FCA at the handover, FOB on board. For inland clusters such as Ludhiana, Jaipur, Moradabad or Panipat, FCA at the inland container depot keeps the rail leg under your booking. And never leave the origin-charges line at zero, because "FOB India" doesn't cap what the carrier's agent bills at the port (logistics practitioners, 2026, Indicative).

If you don't have a forwarder yet, CIP to your port or airport is the honest seller-arranged option, because the rule fixes all-risks cover in your name. CIF is what the supplier will offer instead. Take it only with the destination agent's tariff in writing, because that's where CIF bites (importers on trade forums, 2025 to 2026, Indicative).

If you want a delivered price, ask for DAP to your address, with the FOB price and freight shown separately so you can compare and so customs can value it. Not DDP, unless the seller has a registration in your country and you've checked what it does to your VAT reclaim and your FTA claim.

Never, from India, sign EXW. Only an Indian holder of an Importer Exporter Code can file the shipping bill, so a foreign buyer can't perform the term. The ICC's own advice for buyers who can't clear export is FCA.

The term also changes your customs value. The US, New Zealand and Australia value on a basis that excludes international freight and insurance, so a CIF or DAP price needs a breakdown or you'll pay duty on the shipping. The UK and the EU add transport to the border anyway. The UAE charges "5 per cent of the value CIF" on most goods (UAE Government portal (opens in a new tab), updated 14 Sep 2026, Verified). The method for the duty itself is on working out the real import duty, and the destination pages carry the rates (Australia, New Zealand, United States, United Kingdom, UAE, EU). Build the comparison in the landed cost calculator before you accept any term. If you'd like the three most common terms in a first-person read, Yash's post on CIF, DDP and FOB is the friendlier way in.

8. How To Write It

Rule, named place, edition. FOB Nhava Sheva, Incoterms 2020. FCA ICD Dadri, Incoterms 2020. DAP [address], Auckland, Incoterms 2020. Name the place as precisely as you can, down to the terminal or the loading bay, because under every rule the named place is where money or risk changes hands. Put the same line on the RFQ, the quote, the PO and the commercial invoice, so nobody downstream has to guess (MOQ and pricing covers the RFQ line).

9. Terms That Aren't Incoterms

You'll see C&F, CNF, "FOB Origin", "FOR", "door delivery", "EXW loaded", "DDP VAT unpaid" and "CIF landed" on quotes. None is an Incoterms 2020 rule. Some are retired terms, some are US or Indian domestic usage, and some are private variations that leave the risk point undefined. If one appears then ask the supplier to restate it as one of the eleven rules, with the edition, and put any extra wish in a separate clause.

Each has a home. C&F is on the CFR page, FOB Origin and "FOB value" on the FOB page, FOR on the FCA page, door delivery on the DAP page, EXW loaded and ex-godown on the EXW page, DDP VAT unpaid on the DDP page, and CIF landed on the CIF page.

10. Keep The Payment Wording On Its Own Line

Indian quotes often carry the delivery term and the payment term in one breath: "FOB Nhava Sheva, 30% advance, balance against B/L copy". The second half is not part of the Incoterm, and the rules say nothing about it. Keep both, but keep them apart.

Exporters on Indian trade forums rank what they'll accept as advance first, then a letter of credit, then documents against payment, and some distrust "payment against B/L" because buyers have gone quiet once the goods sailed (Indian exporters, 2026, Indicative). From your side, a B/L copy proves a sealed box left India, not what's in it. Read how to pay an overseas supplier safely before you agree to either.

Back To The Held Container

The fix the US seller was pointed to is the whole hub in one line: book the freight yourself. Pick the term that puts the booking and the paperwork with people who answer to you, name the place, write the edition, and keep payment on its own line.

If you'd rather not build the forwarder side from scratch, SourcingSync (opens in a new tab) books freight from Indian depots, gets origin charges in writing and stands as exporter of record when the maker can't. The knowledge on this page stays free either way.

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