How to Calculate Export Pricing – A Complete Guide for Indian Exporters
📍 Introduction
One of the most common questions new exporters ask is:
“How do I price my product for international buyers?”
Whether you’re exporting spices, garments, or industrial parts, calculating the right export price is critical for staying competitive and profitable.
This step-by-step guide will walk you through:
- Key cost components
- Incoterm-based pricing (FOB, CIF, etc.)
- Export duties & bank charges
- Profit margins
- Real-world pricing strategy tips
💰 Why Export Pricing Is Different from Domestic Pricing
Unlike domestic sales, export pricing involves:
- International freight
- Customs compliance
- Currency exchange
- Foreign bank charges
- Buyer expectations based on Incoterms
Your pricing must be clear, accurate, and based on landed cost logic.
🧾 Key Components of Export Price
Here’s a breakdown of what to include:
| Cost Component | Description |
|---|---|
| Product Manufacturing Cost | Raw material, labor, packaging |
| Overheads | Admin, marketing, warehousing |
| Local Transport | Factory to port or airport |
| Loading & Handling Charges | CHA, terminal, container fees |
| Freight Charges | Sea or air freight (depending on Incoterm) |
| Insurance | Required for CIF, CIP Incoterms |
| Bank Charges | LC fees, forex margin, Swift charges |
| Duties / Certifications | As applicable (Phytosanitary, FSSAI, etc.) |
| Profit Margin | 10–20% recommended |
⚙️ Export Price Based on Incoterms
The final price depends on the Incoterm agreed with your buyer. Here’s a quick example:
| Incoterm | Include Freight? | Include Insurance? | Who Pays Import Duty? |
|---|---|---|---|
| EXW | ❌ No | ❌ No | Buyer |
| FOB | ✅ Yes (up to port) | ❌ No | Buyer |
| CIF | ✅ Yes | ✅ Yes | Buyer |
| DDP | ✅ Yes | ✅ Yes | Seller (you) |
✅ Tip: Most Indian exporters quote FOB or CIF.
📊 Example: Export Pricing Calculation (FOB)
Let’s say you are exporting cotton towels:
- Manufacturing cost: ₹80/unit
- Packaging: ₹10/unit
- Local transport + handling: ₹15/unit
- Overheads: ₹5/unit
- Profit margin (20%): ₹22/unit
→ Total FOB Price = ₹132/unit
If you want to quote CIF, add:
- Freight charges: ₹18
- Insurance: ₹5
→ CIF Price = ₹155/unit
🧠 Tips to Stay Competitive Without Losing Profit
✅ Research competitor pricing on B2B platforms
✅ Adjust margin based on volume: lower margin = higher orders
✅ Avoid under-pricing — it leads to low-quality perception
✅ Use RoDTEP benefits and drawback schemes to boost margin
✅ Convert price into buyer’s currency at realistic exchange rate
📥 Free Download: Export Pricing Worksheet
Get a pre-formatted Excel template to calculate your export price step-by-step.
