An export price is not your domestic price converted into dollars. Domestic GST falls away when you export under LUT, but a set of costs appears between your factory and the vessel. Miss one and the margin disappears. This is the order to build it in.
Step 1: Cost of the goods
Start with the cost to produce or buy the goods, excluding GST. If you export under LUT you do not charge GST, and you can claim a refund of the input tax credit on what you bought.
Step 2: Export packing
Export cartons, pallets, shrink wrap, labelling in the buyer's language, and fumigation if you use wooden pallets or crates.
Step 3: Costs up to the port (FOB costs)
- Inland transport from your factory to the port, ICD or CFS
- CHA (customs broker) charges for filing the shipping bill
- CFS / terminal handling and container stuffing charges
- Documentation: certificate of origin, inspection, phytosanitary certificate where needed
- Bank charges for handling export documents
- Export credit insurance (ECGC), if you take it
Step 4: Your margin
Add your profit margin on top. Many exporters build it on cost; whatever you choose, apply it the same way every time so quotes stay consistent.
Step 5: Convert to the buyer's currency
Use a slightly conservative exchange rate — not today's best rate — because payment may arrive 60 to 90 days later. Many exporters use the bank's buying rate less a small buffer.
Cost of goods + packing + costs to the port + margin = FOB price.
Try it with your own numbers in our free export price calculator.
Step 6: From FOB to CFR and CIF
- CFR = FOB + ocean freight to the destination port (get a current quote from your forwarder).
- CIF = CFR + marine insurance. Insurance is commonly taken on 110% of the CIF value.
A worked example
| Item | ₹ per container |
|---|---|
| Goods (ex-GST) | 10,00,000 |
| Export packing | 25,000 |
| Inland freight to port | 30,000 |
| CHA, CFS and documentation | 20,000 |
| Bank charges | 5,000 |
| Cost up to FOB | 10,80,000 |
| Margin 12% | 1,29,600 |
| FOB price | 12,09,600 |
At a working rate of ₹83 to the dollar that is about USD 14,573 FOB. Add the freight quote for CFR, and insurance for CIF. The figures are only an illustration — use your own costs and current rates.
Don't forget incentives — but don't price them in blindly
Export incentives such as RoDTEP and duty drawback can improve your margin, but rates and schemes change by notification. Treat them as a bonus you confirm on the DGFT and CBIC sites, not as a discount you give away up front.
How Eximly helps
Eximly holds your products with separate export and domestic prices, quotes in any currency, and carries freight and insurance as separate lines onto the proforma and commercial invoice, so FOB, CFR and CIF stay clear for the buyer, the bank and customs. Each order's P&L then shows what you actually made once costs and payments come in. Try it free for 30 days.
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