Guide
Many importers find their landed cost only after the shipment arrives. Work it out before you place the order.
Last checked: November 2026
Please note: Rules, duty rates and procedures change. Check the position in force on the date of your shipment. We are consultants, not a law firm.
The short answer
- Landed cost is the price of the goods plus everything it costs to get them to your warehouse.
- Which costs you pay depends on the Incoterm.
- In India, duty is calculated on the assessable value, which includes freight and insurance.
The steps
- Price of the goods from the supplier.
- International freight and insurance. Who pays depends on the Incoterm.
- Port and handling charges at the destination.
- Customs duty and taxes. In India this generally means basic customs duty, any applicable surcharge, and IGST.
- Delivery to your warehouse.
Three Incoterms in brief
- FOB: the buyer arranges the main freight and insurance, and carries the risk from loading.
- CIF: the seller pays freight and minimum insurance to the destination port. Risk still passes at loading.
- DDP: the seller takes on import clearance. For a foreign seller selling into India this is often hard to do properly, so check first.
Before you ship
Our Shipment Readiness Check gives you a document checklist. Send us the details of an import and we can tell you the Indian duty heads to expect.
Common questions
Is freight included in the value for Indian duty?
Generally yes. The assessable value normally includes freight and insurance, with a landing charge as the valuation rules prescribe. Duty is then calculated on that value.
Which Incoterm is best for a first import?
There is no single best one. Importers who want control over freight and cost often choose FOB. Those who want the supplier to arrange the transport often choose CIF. Ask every supplier to quote on the same basis so that you can compare.
Can a foreign seller use DDP for India?
It is possible only if the seller can handle Indian import clearance and taxes, which usually needs Indian registrations. In practice it is often hard to do properly, so check before you agree to DDP.
Related on this site
- Shipment Readiness Check
- Customs costs that bidders miss
- How to import duty-free in India
- Marine cargo insurance
- Getting paid safely: Letters of Credit, open account and cargo insurance
Talk to us
Send us two lines on WhatsApp: the goods, the port or country, and what you need. We tell you what we need from you and our fee, in writing, before any work starts. We reply within one working day (Monday to Saturday, 10 AM to 7 PM IST).
Multimodal Logistic Systems Pvt. Ltd., Pune, India. Written by Shankar Jha, Customs and EXIM consultant with 27+ years of experience. Rules and notifications change; we check those in force on the date of your query.