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Incoterms & Dumping

Terms of Delivery (INCOTERMS)


in International Transactions

 In export-import transactions, prices are generally


quoted using internationally accepted terms of delivery,
known as INCOTERMS, used to describe the rights and
responsibilities of the buyers and the sellers with regard
to sale and transport of goods.
INCOTERMS for Sea and
Inland Waterways
 FAS (Free Alongside Ship) : All expenses upto goods in
Docks are borne by exporter. Thereafter by importer.

 FOB (Free on Board) : All expenses till goods ‘on Board’’


the vessel to Exporter. Thereafter by importer.

 CFR (Cost and Freight) : All expenses till On Board the


vessel & Sea Freight till destination by exporter.
Thereafter by importer.

 CIF (Cost, Insurance and Freight) :All expenses till ‘On


Board ‘’the vessel, freight to destination & Insurance
for transit by exporter. All other by importer.
INCOTERMS for any Mode or
Modes of Transportation
 EXW (Ex Works) : All expenses till Gate of factory by Exporter.
Thereafter by importer.

 FCA (Free Carrier) : All expenses till goods on board carrier.


Thereafter by importer.

 CPT (Carriage paid to) : All expenses till goods on board carrier &
freight till destination are borne by exporter. Thereafter by importer.

 CIP (Carriage and Insurance Paid To): All expenses till goods on board
carrier, freight till destination & Insurance in transit are borne by
exporter. Thereafter by importer.

 DAT (Delivered at Terminal) : CIP + Unloading charges & Terminal/port


charges are borne by exporter. Thereafter by importer.

 DAP (Delivered at Place): DAT + Customs Duty + Transport to place of


delivery.
Dumping

 Dumping is a widely used competitive strategy in


international markets.

 It means selling of a product or commodity below the


cost of production or at a lower price in overseas
markets compared to domestic markets.

 It is considered as ‘unfair’ trade practice by the World


Trade Organization (WTO).
Forms of Dumping

 Sporadic Dumping : Exporting surplus production at lower


price to get rid of excess inventory

 Predatory Dumping : Exporting at low price with the


intention of throwing local competition out of business & at
a later date increase prices to gain profits.

 Persistent Dumping : Continuous exporting at lower prices


as a monopolistic strategy to control overseas market