Logistics · How to
Incoterms for apparel imports: EXW, FOB & CIF from Nepal explained
Incoterms decide who pays for freight and who carries the risk at each stage. Here’s what EXW, FOB, and CIF mean for importing garments — and how landlocked Nepal ships.
A quote of “$3.20 EXW” and “$3.60 FOB” aren’t really different prices — they include different things. Incoterms define where the factory’s responsibility ends and yours begins. Getting them right avoids nasty surprises at the port.
The three you’ll see most
- EXW (Ex Works) — you take the goods at the factory door and arrange everything after: inland transport, export, freight, import. Cheapest headline price, most work for you.
- FOB (Free On Board) — the factory delivers the goods, cleared for export, onto the vessel at the port. You handle sea freight and import. The most common apparel term.
- CIF (Cost, Insurance & Freight) — the factory arranges and pays sea freight + insurance to your destination port. You handle import clearance and delivery from there.
How landlocked Nepal ships
Nepal has no seaport, so bulk sea freight routes overland to Indian ports (typically Kolkata/Haldia or Visakhapatnam) and sails from there — which is why you’ll often see “FOB Kolkata.” Air freight is available for samples and urgent runs. A good factory handles the export documentation and duty paperwork for you.
Shipping by air? Use FCA, not FOB
FOB only applies to sea and inland-waterway freight — there is no such thing as “FOB by air”. For air freight the right term is FCA (Free Carrier) at a named place: from us, typically FCA Kathmandu, meaning we deliver the goods, cleared for export, to your airline or forwarder at Tribhuvan International Airport. The ICC also recommends FCA rather than FOB for containerised sea freight, because the container is handed over at a terminal before it is loaded. See how our sea and air routes work.
Which should you quote?
If you’re new to importing, FOB or CIF keeps it simpler — the factory gets your goods onto the water. As you scale and get your own freight forwarder, EXW/FOB can save money. Tell us your destination and we’ll quote the term that suits you. Get a quote.
About the author
Santosh Rijal runs Trishakti Apparel, the export knitwear factory his family built on three decades in Nepal’s fashion trade. He writes about sourcing, duty and production from the factory floor in Gaindakot.