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Export costing

Export price build-up

Factory gate to CIF, in rupees and dollars, per unit and per shipment.

Exchange rates
Purchase & margin
Logistics (₹ total unless noted)
Incentives & charges
Your EXW → CIF ladder will appear here.

How to build an export price: EXW to CIF

An export quote is a ladder. Each Incoterm adds a defined block of cost, and the price you quote has to state which rung you are standing on. Quoting "USD 1,600 per tonne" means nothing until the buyer knows whether that is ex-works or delivered to their port.

  1. 1
    EXW — Ex Works Your purchase cost plus input GST, plus your margin. The buyer takes over at your gate and bears everything after it.
  2. 2
    FOR — Free On Road / Rail Adds inland transport from your works to the port of loading. Common in Indian domestic contracting and often skipped in international templates, which is why it is a frequent source of unquoted cost.
  3. 3
    FOB — Free On Board Adds export clearance, CHA charges and terminal handling. Risk passes to the buyer once goods are on board. This is the rung most Indian exporters quote and the one that determines RoDTEP and drawback entitlement.
  4. 4
    CFR / CNF — Cost and Freight Adds ocean or air freight to the destination port. Note that you buy that freight in dollars at your bank's selling rate while you are paid at the buying rate — the spread is a real cost most spreadsheets ignore.
  5. 5
    CIF — Cost, Insurance and Freight Adds marine insurance, conventionally written on 110% of CFR to cover the buyer's expected profit.

Input GST on an export is cash flow, not cost

Exports are zero-rated. The GST you pay your domestic supplier is refundable, either against a LUT without payment of tax or by claiming a refund of IGST paid. It leaves your bank account and comes back, which makes it a working-capital item rather than a cost of goods. Loading it into your FOB price makes you uncompetitive by exactly the refund amount.

Where margin should sit

Margin applied to ex-works goods cost is the conservative convention and the one most Indian exporters use. Applying it further up the ladder — on FOR or FOB cost — earns margin on freight and clearance too, which is defensible when you are carrying the risk on those items. What matters is being consistent, because switching bases between quotes makes your realised margins impossible to compare.

The exchange rate trap

A rupee of movement on a USD 40,000 shipment is ₹40,000 of margin. Quote validity of even a week carries real currency risk, which is why this calculator shows CIF at ±2% and ±5% on the rate. If the shipment stops being profitable at −2%, either shorten the quote validity or hedge.

Export pricing and Incoterms questions

What is the difference between FOB, CFR and CIF?
FOB covers all costs to place the goods on board the vessel at the port of loading. CFR adds ocean or air freight to the destination port. CIF adds marine insurance on top of CFR, conventionally written on 110% of the CFR value.
What is FOR and why does it sit between EXW and FOB?
FOR means Free On Road or Free On Rail. It is ex-works cost plus inland transport to the port, before export clearance and terminal handling are added to reach FOB. It is widely used in Indian domestic contracting and is where unquoted inland freight usually hides.
Should I use the bank buying rate or selling rate in an export quote?
Both. You realise export proceeds at the bank buying rate, so convert your rupee costs to dollars at the buying rate. But you purchase ocean freight and other dollar costs at the selling rate. Using a single rate for both understates cost by the size of the spread.
Is GST paid on inputs part of my export cost?
No. Exports are zero-rated supplies, so input GST is refundable either under a Letter of Undertaking or by claiming refund of IGST paid. Treat it as a working-capital item, not a cost of goods, or you will price yourself above the market by the refund amount.
How is RoDTEP realised?
RoDTEP is issued as a transferable electronic scrip against the FOB value declared on the shipping bill. Its cash value depends on the scrip market rate on the day you sell it, which is normally below face value, so do not book it at 100%.