Landed Cost for Export from India: Formula and Duty Factors

Estimate what the overseas buyer pays when you export from India: product, freight, insurance, destination duty, and FTA effects. Checked: 2026-09-24.

Checked: 2026-09-24

This guide is educational. HS classification, destination duties, FTAs, and GST LUT/bond rules are regulated. It is not legal, tax, or customs advice. Confirm every rate with official tariff pages and your CHA or counsel before you ship.

Landed cost is what the overseas buyer (or you, if you sell on DDP-style terms) effectively pays when you export from India: product cost, packing, inland haul, international freight, insurance, destination import duty, and local clearance. If you price only from factory cost, margins vanish once duty and last-mile fees hit.

This post gives a working formula, where to look up official duty factors, and how FTAs change the number. It does not invent duty percentages.

What is landed cost in export pricing?

Landed cost is the full cost of getting goods into the buyer's country, ready for sale or use. For Indian ecommerce exporters, the usual building blocks are:

1. Ex-works or FOB product cost (cost of goods, packing, inland haul to port or airport, export clearance).
2. International freight and insurance (who pays depends on the Incoterm).
3. Destination import duty and taxes (based on HS code and destination rules).
4. Destination clearance, brokerage, and sometimes VAT or GST that the importer pays.

Use the ICC Incoterms 2020 overview to see which lines sit with seller versus buyer under FOB, CIF, DAP, and similar terms.

What is a simple landed cost formula?

A working estimate:

Landed cost (buyer currency) ≈ (Product cost + Export packing + Inland to port + International freight + Insurance + Destination duty + Clearance/brokerage + Other destination fees), converted with FX if needed

Notes:

• Under FOB, the buyer usually pays main carriage and insurance after the goods are on board, so your quote may stop earlier. Under CIF, your price includes carriage and minimum insurance to the named port, but destination duty still sits with the buyer unless you agreed otherwise.
• Destination duty is not a single India-side number. It is set by the destination customs tariff for your HS code.
• Do not paste universal bands such as "US 0-20%" or "EU 5-15%". Look up the rate for your code and market, then date-stamp it.

How do tariffs and duties affect the number?

Three separate systems matter:

1. India export side: Correct ITC(HS) classification, shipping bill on ICEGATE, and GST on exports (generally zero-rated when conditions are met, for example LUT/bond where eligible: GST LUT guide). Misclassification creates compliance risk.
2. Destination import duty: Read the destination country's tariff schedule for your HS code (US HTS, EU TARIC, UAE tariff, and so on). Rates change. Always record the date you checked.
3. Preferential duty under an FTA: Only if the product meets rules of origin and you hold the required proof. India's agreement materials and related appendices are on DGFT. Preferential rates are product- and agreement-specific.

India's own customs tariff reference (useful for HS structure, or when you import inputs) is on CBIC Customs Tariff.

How do you work an example without inventing rates?

Use placeholders and fill from official sources:

Line	Example placeholder	Where to get the real figure
Product cost (INR)	Your COGS	Your books
Inland + export clearance	Quote from CHA / consolidator	Service provider
International freight	Carrier quote for weight/volume	Carrier / forwarder
Insurance	Policy quote	Insurer / Incoterm requirement
Destination duty	Tariff % × customs value	Destination tariff for that HS
Clearance / VAT	Broker quote + tax rules	Destination broker / tax authority

Then convert to the buyer's currency with a bank or marketplace FX rate you can defend on the settlement date.

How do FTAs change landed cost?

FTAs can lower destination duty when:

• India has an agreement with that market (or a PTA / CEPA covering your product).
• Your product's HS code is in the preferential schedule (some lines are excluded or staged).
• You meet origin rules and hold the correct certificate or self-declaration form.

Steps:

1. Confirm the agreement on Commerce / DGFT official lists.
2. Check the product-specific preferential rate and staging.
3. Confirm origin criteria (wholly obtained, value addition, CTSH, and so on).
4. Price two landed-cost scenarios: MFN duty versus preferential duty.

If you cannot prove origin, price at MFN. Preferential claims without documents create clearance delays.

What should Indian ecommerce sellers watch for?

• Marketplace payout is not landed cost. Amazon or Walmart fees are separate from destination customs duty. Model both.
• Dimensional weight. Air and courier quotes often bill the higher of actual versus volumetric weight.
• Returns. Cross-border returns can erase a thin landed-cost margin.
• FX. Invoice currency and settlement currency can diverge from your INR cost base.

Checklist before you publish a price

• ☐ HS code checked on DGFT ITC(HS) and destination tariff
• ☐ Incoterm agreed in writing
• ☐ Freight + insurance quotes dated
• ☐ Destination duty looked up for that HS (with date)
• ☐ FTA preference checked only with origin path defined
• ☐ Marketplace fees modelled separately
• ☐ FX assumption written down

Next step

When marketplace fees are part of your margin model for Amazon Global Selling, run the numbers on the ExportDuniya fee calculator. Duty and freight still need official tariff and carrier inputs.