Commonly Used Terms

The International Chamber of Commerce has divided Incoterms® under 11 heads. International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1st January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.

International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.

The ICC has listed down the following Incoterms -

Incoterms applicable to any mode of transportation:

1. EXW (Ex Works)

2. FCA (Free Carrier)

3. CPT (Carriage Paid To)

4. CIP (Carriage and Insurance Paid To)

5. DPU (Delivered at Place - Unloaded)

6. DAP (Delivered at Place)

7. DDP (Delivered Duty Paid)

Incoterms applicable for Sea and Inland Water transportation:

1. FOB (Free on Board)

2. FAS (Free Alongside Ship)

3. CFR (Cost and Freight)

4. CIF (Cost Insurance and Freight)