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Glossary
Every trade term, in plain language.
A
- Airway Bill (AWB)
- The transport document for air cargo. It is a receipt for the goods and the contract with the airline, but unlike a bill of lading it is not a document of title.
B
- Basic Customs Duty (BCD)
- The main import duty in India, charged as a percentage of the assessable value of the goods. The rate depends on the HS code.
- Bill of Entry
- The declaration an importer (or their customs broker) files with Indian customs to clear goods for home use or warehousing.
- Bill of Lading (B/L)
- Issued by the shipping line for sea cargo. It is a receipt for the goods, evidence of the contract of carriage, and a document of title: whoever holds the original can claim the cargo.
C
- CBM
- Cubic metre: length × width × height in metres. Freight for sea LCL shipments is usually charged per CBM.
- CIF
- Cost, Insurance and Freight. An Incoterm where the seller pays the cost of goods, insurance and freight to the destination port. Indian customs uses the CIF value to work out duty.
- Commercial Invoice
- The seller’s bill to the buyer: what was sold, quantity, price and terms. Customs uses it to check the value of the goods.
- Customs Broker (CHA)
- A licensed agent who files customs paperwork and clears goods on your behalf. Often still called a Custom House Agent.
D
- Drawback
- A refund of customs and excise duties paid on inputs used to make goods that are then exported.
F
- FCL
- Full Container Load: you book a whole container for your cargo alone.
- FOB
- Free On Board. An Incoterm where the seller delivers the goods loaded on the ship at the port of export; the buyer pays the freight from there.
- Free Trade Agreement (FTA)
- A deal between countries that lowers or removes duty on goods that meet its rules of origin. You usually need a certificate of origin to claim it.
H
- HS Code
- The Harmonized System number that classifies a product for customs worldwide. India uses an 8-digit version (ITC-HS) that decides your duty rate and any import or export rules.
I
- IEC
- Importer Exporter Code: a 10-digit code from the DGFT that every business needs to import or export from India.
- IGST
- Integrated GST charged on imports, on the assessable value plus customs duty. Registered businesses can usually claim it back as input tax credit.
- Incoterms
- Standard trade terms (like FOB, CIF, EXW, DDP) that say who pays for what and where the risk passes from seller to buyer.
L
- Landed Cost
- The total cost of getting goods to your door: product price, freight, insurance, duties, taxes and local charges. The number you need before you set a selling price.
- LCL
- Less than Container Load: your cargo shares a container with other shippers’ cargo. You pay for the space you use, usually per CBM.
P
- Packing List
- A document listing every package in a shipment, with contents, weights and dimensions. Customs and the warehouse use it to check what is inside.
R
- RoDTEP
- Remission of Duties and Taxes on Exported Products: an Indian scheme that refunds certain embedded taxes to exporters as transferable duty credits.
T
- TEU
- Twenty-foot Equivalent Unit: the standard measure of container capacity. A 20ft container is 1 TEU; a 40ft is 2 TEU.
V
- Volumetric Weight
- A weight worked out from a package’s size. Carriers charge on whichever is higher, the actual weight or the volumetric weight. For air cargo it is usually length × width × height in cm ÷ 6,000.