Understanding Incoterms for Hemp Trade
When you source industrial hemp from India, one of the first decisions you'll make is which Incoterm (International Commercial Term) to use. This determines who pays for what — shipping, insurance, customs, duties — and where the risk transfers from seller to buyer.
The three most common for hemp imports from India are FOB, CIF, and DDP. Let's break each one down.
FOB (Free on Board)
What it means: The seller delivers the goods to the port of origin (e.g., Mumbai, Chennai). Once loaded onto the vessel, risk and cost transfer to you, the buyer.
You're responsible for:
- ✓ Ocean/air freight from Indian port to your destination
- ✓ Marine cargo insurance
- ✓ Import customs clearance in your country
- ✓ Import duties and taxes
- ✓ Last-mile delivery from port to your warehouse
Best for: Experienced importers who have freight forwarders, customs brokers, and established logistics relationships. You control costs and often get better rates through your own network.
CIF (Cost, Insurance & Freight)
What it means: The seller covers the cost of goods, freight to your destination port, and basic marine insurance. However, risk transfers to you once goods are loaded at the origin port.
You're responsible for:
- ✓ Import customs clearance
- ✓ Import duties and taxes
- ✓ Port handling at destination
- ✓ Last-mile delivery to your warehouse
Best for: Buyers who want freight included in the quote for easier comparison but still handle their own customs clearance.
DDP (Delivered Duty Paid)
What it means: The seller (or sourcing agent like HemPortal) handles everything — from factory to your doorstep. Freight, insurance, customs, duties, last-mile delivery. You receive the goods at your warehouse, ready to use.
You're responsible for:
- ✓ Unloading at your facility
- ✓ That's it — everything else is handled
Best for: First-time importers, buyers without logistics infrastructure, or anyone who wants a predictable, all-in price with zero surprises.
Side-by-Side Comparison
| Factor | FOB | CIF | DDP |
|---|---|---|---|
| Freight | Buyer | Seller | Seller |
| Insurance | Buyer | Seller (basic) | Seller |
| Customs | Buyer | Buyer | Seller |
| Duties & Taxes | Buyer | Buyer | Seller |
| Risk Level | Higher | Medium | Lowest |
| Best For | Experienced | Intermediate | First-timers |
Which Should You Choose?
The right choice depends on three factors:
- Your experience: If this is your first hemp import, DDP eliminates the learning curve. You get a single, all-in price.
- Your order size: For orders above $25,000, FOB often makes more sense because you can negotiate better freight rates independently.
- Your logistics setup: If you already have a customs broker and freight forwarder, FOB gives you more control and typically lower total cost.
Pro Tip
Start with DDP for your first order to understand the full landed cost. Once you know the breakdown, switch to FOB for subsequent orders to save 10-15% on logistics.
HemPortal's Pricing by Incoterm
FOB/CIF
5%
of order value (min $250)
Orders $5,000+
DDP
7%
of order value (min $700)
Orders $9,999+
Not Sure Which Model to Choose?
Submit your RFQ and we'll quote both FOB and DDP so you can compare.
Request a Quote