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    FOB vs CIF vs DDP: Which Incoterm Should You Use? (2026 Guide)

    TL;DR: The choice between FOB, CIF, and DDP determines who pays for freight, insurance, and customs — and how much risk you carry. Here is the plain-English breakdown with cost examples for India-to-US shipments.

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    By Sanjay Sachdev, Partner & Head of SourcingUpdated April 202630+ yrs sourcing experience

    FOB (Free On Board)

    Seller delivers cargo loaded onto the vessel at origin port. Buyer takes ownership and risk from that point — and arranges ocean freight, insurance, customs, and last-mile delivery.

    CIF (Cost, Insurance, Freight)

    Seller pays ocean freight and basic insurance to the destination port. Buyer handles customs clearance and last-mile delivery.

    DDP (Delivered Duty Paid)

    Seller delivers to the buyer's door with all duties, customs, and last-mile shipping included. Maximum convenience, single line item invoice.

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    Frequently Asked Questions

    Is FOB or DDP better for first-time importers?

    DDP is safer for first-time importers because all customs and duty risk sits with the seller/forwarder.

    What is the difference between FOB and CIF?

    CIF includes ocean freight and insurance to the destination port; FOB ends at origin port loading.

    How do I get started with Small World India?

    Send us your product specs or reference images via the contact form. Within 48 hours we shortlist 3 vetted factories with FOB pricing, MOQ, and lead times — at no cost.

    What is the typical MOQ for sourcing from India?

    MOQs range from 100 units (jewelry, handicrafts) to 5,000+ units (textiles, packaging). We negotiate flexible MOQs for first orders and combine SKUs across factories when needed.

    How does Small World India ensure product quality?

    Every order includes factory audit, mid-production inspection, and pre-shipment AQL 2.5 inspection by our in-house QC team. You receive photos, videos, and a full inspection report before shipment leaves the port.

    Which countries do you ship to?

    We export to 50+ countries with primary buyer concentration in the USA, UK, Germany, France, Netherlands, Australia, Canada, UAE, and Japan. We handle FOB, CIF, and DDP terms.

    What are your fees?

    Standard sourcing commission is 5–10% of FOB value, billed only after you confirm a PO. Inspections and freight are billed at cost with no markup.

    Why source from India instead of China in 2026?

    India offers FTA duty advantages with UK/AU/UAE/Japan, no Section 301 tariffs for US importers, English-speaking factories, lower IP risk, and competitive pricing in 25+ verticals including apparel, decor, jewelry, leather, and engineering.