Export Costing Calculator: FOB, CFR & CIF Price

How to calculate CIF value

The CIF formula is simple: CIF = FOB + freight + insurance. FOB is the value of the goods loaded on board at the Indian port, freight is the ocean or air charge to the named destination port, and insurance is the marine premium the seller buys for the buyer's benefit — conventionally on 110% of the CIF value. Everything after the destination port (import duty, destination handling, delivery) is the buyer's cost under CIF and is not part of the CIF value.

The insurance line is the one people get wrong. Because the premium is charged on 110% of CIF, and CIF includes the premium, the exact relationship is CIF = CFR ÷ (1 − 1.1 × rate): 11,200 ÷ (1 − 1.1 × 0.003) = 11,237. Charging 0.30% on the CFR figure instead gives 11,234 — a small gap on one container, but it is the gap between a quote and the invoice a bank will check under a letter of credit. The calculator above solves it exactly.

FOB vs CFR vs CIF: what is the difference?

All three are Incoterms 2020 rules for sea and inland-waterway transport, and under all three the risk of loss passes from seller to buyer when the goods are on board the vessel at the port of loading. What changes is how much of the cost of the voyage the seller has included in the price.

In practice, FOB is what most Indian exporters quote and what the shipping bill declares; CFR and CIF are what buyers in markets that expect a landed-port price ask for. For air and multimodal shipments the equivalents are FCA, CPT and CIP. The Incoterms 2020 guide covers the full set, and the CBM calculator gives you the volume the freight quote is based on.

How export costing works: from ex-works to CIF

An export price is not one number but a ladder. Each Incoterm marks a point on that ladder where responsibility for cost and risk moves from you to your buyer, and each step upward adds a specific, nameable set of charges. Quote a term without pricing in the charges it makes yours and the shortfall comes straight out of margin — which is why two exporters can quote what looks like the same price and end the year with very different results.

The ladder starts at ex-works: the cost of the goods at your factory gate, with the buyer responsible for everything after. Add the margin you want on the goods, then the cost of getting the consignment to the port of loading — inland haulage, terminal handling, port and customs charges, documentation, and the bank and inspection fees that attach to an export consignment. That total is your FOB price, and it is the figure most Indian exporters quote and most under-build, because the origin charges are many and individually small.

Add the ocean freight to the destination port and FOB becomes CFR. Add marine insurance and CFR becomes CIF. The insurance step has a wrinkle worth knowing: cover is conventionally written for 110% of the CIF value, so the premium forms part of the very figure it is calculated on. Charging the rate against CFR instead — the usual shortcut — quietly understates the premium. This calculator solves the relationship properly, so the CIF number it gives you is one you can put in a proforma invoice without adjusting later.

One thing this tool will not do is guess your incentive. RODTEP and duty drawback are set per HS code and revised by notification, so any rate table published on a page like this would go stale without telling you. Enter the realisation you actually expect for your products and the calculator will show what it does to your margin. If you want those claims tracked per order against the rates that apply to you, that is the job of the platform rather than the calculator.