Knowledge Base
India Sourcing & Trade Glossary
50+ essential terms every buyer needs to know when sourcing products from India — from Incoterms and shipping to quality inspection and compliance.
53 terms found
A
AI-ECTA (Australia-India ECTA)
TradeEconomic Cooperation and Trade Agreement reducing tariffs on 85%+ of Australian imports from India, effective December 2022.
Australia SourcingAnti-Dumping Duty
CustomsAdditional import duty imposed when a foreign manufacturer sells goods below fair market value, harming domestic producers.
AQL (Acceptable Quality Level)
QualityStatistical sampling system for quality inspection. AQL 2.5 for major defects and AQL 4.0 for minor defects is standard for consumer goods.
Inspection ServicesB
Bill of Lading (B/L)
DocumentationA legal document issued by the carrier to the shipper detailing the type, quantity, and destination of goods. Acts as a receipt and title of goods.
BRC (British Retail Consortium)
CertificationsGlobal standard for food safety and quality. Required by most UK and European retailers for food product imports.
Buying House
Trade TermsA company that acts as an intermediary between international buyers and local manufacturers, typically handling sourcing, quality control, and logistics.
C
CBM (Cubic Meter)
ShippingStandard measurement for shipping volume. Calculated as Length × Width × Height in meters. Used to determine freight costs for LCL shipments.
CBM CalculatorCE Marking
ComplianceMandatory conformity mark for products sold in the European Economic Area (EEA). Indicates compliance with EU health, safety, and environmental requirements.
Certificate of Origin (COO)
DocumentationDocument certifying the country where goods were manufactured. Required for preferential duty rates under trade agreements like AI-ECTA.
CFR (Cost and Freight)
IncotermsSeller pays costs and freight to bring goods to the destination port. Risk transfers once goods are loaded on the vessel.
CIF (Cost, Insurance, Freight)
IncotermsSeller pays cost, insurance, and freight to bring goods to the port of destination. Risk transfers once goods are on board the vessel at origin.
Incoterms ExplainerCLI (Container Loading Inspection)
QualitySupervising the loading of goods into containers to verify quantity, condition, and proper stowage for transit.
CMT (Cut, Make, Trim)
ProductionManufacturing arrangement where the buyer supplies fabric and the factory only charges for cutting, sewing, and finishing. Lower cost but more buyer involvement.
Commercial Invoice
DocumentationA bill from seller to buyer detailing goods sold, quantities, prices, and payment terms. Primary document for customs valuation.
Countervailing Duty (CVD)
CustomsDuty imposed on imported goods that benefit from government subsidies in the exporting country.
CPSC (Consumer Product Safety Commission)
ComplianceUS federal agency regulating consumer product safety. Products must meet CPSC standards for flammability, lead content, and labeling.
Customs Broker
CustomsLicensed professional who handles import/export documentation, duty payments, and customs clearance on behalf of importers.
D
DDP (Delivered Duty Paid)
IncotermsSeller delivers goods to the buyer's premises, cleared for import and with all duties paid. Maximum obligation for the seller.
DUPRO (During Production Inspection)
QualityInspection conducted when 20-40% of production is complete to catch quality issues early before full production.
Duty Drawback
CustomsRefund of customs duties paid on imported materials that are subsequently used to manufacture goods for export.
E
EXW (Ex Works)
IncotermsSeller makes goods available at their premises. Buyer bears all costs and risks from that point, including export clearance and freight.
F
FCL (Full Container Load)
ShippingShipping a full container (20ft or 40ft) dedicated to one shipment. More cost-effective for large orders, typically 15-28 CBM.
FDA (Food and Drug Administration)
ComplianceUS agency regulating food, drugs, cosmetics, and medical devices. Prior notice and registration required for food imports to USA.
FOB (Free on Board)
IncotermsSeller delivers goods on board the vessel at the named port. Risk transfers to buyer once goods pass the ship's rail. Price includes all costs to the port of shipment.
Incoterms ExplainerFree Trade Agreement (FTA)
TradeTreaty between countries reducing or eliminating tariffs, quotas, and trade barriers. India has FTAs with ASEAN, Japan, UAE, and Australia (AI-ECTA).
G
GOTS (Global Organic Textile Standard)
CertificationsLeading international standard for organic textiles covering ecological and social criteria across the entire supply chain.
GSM (Grams per Square Meter)
TextilesMeasurement of fabric weight/density. Higher GSM = heavier fabric. T-shirts: 140-180 GSM. Denim: 280-400 GSM.
GSM CalculatorGSP (Generalized System of Preferences)
TradePreferential tariff rates granted by developed countries to imports from developing nations. India's GSP with the US was suspended in 2019.
H
HACCP (Hazard Analysis Critical Control Points)
CertificationsSystematic preventive approach to food safety addressing physical, chemical, and biological hazards in production.
HS Code (Harmonized System Code)
CustomsA standardized 6-10 digit numerical code used to classify traded products internationally. Determines applicable duty rates and regulations.
HS Code FinderHTS Code (Harmonized Tariff Schedule)
CustomsThe US-specific version of HS codes, using 10 digits. Used by US Customs (CBP) to determine import duty rates.
I
ISO 9001
CertificationsInternational standard for quality management systems. Demonstrates a manufacturer's ability to consistently provide products meeting customer requirements.
L
Landed Cost
PricingThe total cost of a product delivered to the buyer's warehouse, including purchase price, freight, insurance, customs duties, and handling fees.
Sourcing Cost CalculatorLCL (Less than Container Load)
ShippingSharing container space with other shippers. Suitable for smaller shipments under 15 CBM. Higher per-CBM cost but lower total cost.
Letter of Credit (LC)
PaymentA bank guarantee that payment will be made to the seller once specified conditions (documents) are met. Common in international trade for risk mitigation.
M
MOQ (Minimum Order Quantity)
Trade TermsThe smallest number of units a manufacturer will produce per order. Indian MOQs typically range from 100-500 units for garments, 50-200 for furniture.
O
ODM (Original Design Manufacturer)
ProductionManufacturer that designs and produces products which buyers can brand as their own. Faster to market but less customization.
OEKO-TEX Standard 100
CertificationsIndependent testing and certification system for textile raw materials, intermediate, and end products at all stages of production.
OEM (Original Equipment Manufacturer)
ProductionManufacturer that produces goods to the buyer's specifications and brand. Common arrangement for private label products from India.
P
Packing List
DocumentationDetailed document listing contents, dimensions, and weight of each package in a shipment. Required for customs clearance.
PP Sample (Pre-Production Sample)
ProductionFinal sample made with actual production materials, trims, and labels. Must be approved before mass production begins.
PPI (Pre-Production Inspection)
QualityInspection conducted before mass production begins to verify raw materials, components, and production readiness.
Proto Sample
ProductionThe first sample made from a tech pack to evaluate design, fit, and construction. Usually made in available fabric rather than actual production material.
PSI (Pre-Shipment Inspection)
QualityFinal inspection when 100% of goods are packed. Verifies quality, quantity, packing, marking, and documentation before shipment.
R
S
Section 301 Tariffs
TradeAdditional US tariffs (up to 25%) on goods from specific countries, primarily targeting Chinese imports. India products generally exempt.
SEDEX/SMETA
CertificationsEthical trade audit methodology covering labour standards, health & safety, environment, and business ethics. Required by major Western retailers.
Sourcing Agent
Trade TermsA professional intermediary who helps international buyers find manufacturers, negotiate prices, manage quality, and coordinate logistics in the source country.
Sourcing Agent IndiaT
T/T (Telegraphic Transfer)
PaymentDirect bank-to-bank wire transfer. Common payment method: 30% advance, 70% before shipment or against B/L copy.
Tech Pack
ProductionA detailed specification document for a product including measurements, materials, construction details, colors, and trim specifications used for manufacturing.
TEU (Twenty-foot Equivalent Unit)
ShippingStandard measure for container capacity. One 20ft container = 1 TEU. A 40ft container = 2 TEU.
U
UKCA (UK Conformity Assessed)
ComplianceProduct marking required for goods sold in Great Britain (England, Scotland, Wales) post-Brexit. Similar to CE marking.
Need Help Navigating International Trade?
Our sourcing experts handle the complexity so you can focus on growing your business.
Talk to Our Team