Import & Export
FCA Incoterm for Indian Exporters (2026): 7 Rules That Matter
FCA is EXW fixed for real exports: the buyer still controls main freight, but you load the truck and clear Indian exports — the two jobs a foreign buyer cannot do from abroad.
What FCA means — the 30-second answer
FCA (Free Carrier) means you deliver the buyer's goods to their carrier at an agreed place, cleared for export — and the buyer takes it from there. The buyer arranges main freight, buys insurance if they want it, clears imports and pays duties. Of the 11 Incoterms 2020, FCA is the balanced middle for exporters: you handle the origin side you are legally positioned to handle, and the buyer controls the journey they want to control.
What FCA does not do
FCA does not decide payment timing, currency, ownership or interest. FCA plus 60-day LC and FCA plus advance are different cash positions with the same delivery term. Decide the Incoterm and the payment term as two separate negotiations, then write both into the contract.
Always write the full string: FCA Delhi ICD, Incoterms 2020. The named place plus the version is what your CHA, the carrier, the bank and any court will read. FCA alone, without a place, leaves the handover — and therefore the risk transfer — undefined.
The two FCA delivery points — factory vs terminal
FCA is the only Incoterm with two delivery mechanics, and the contract must pick one. The choice changes who loads, where risk transfers, and what your truck does on the day.
| FCA at seller's premises | FCA at named terminal or place | |
|---|---|---|
| Example wording | FCA Ludhiana Factory, Incoterms 2020 | FCA Delhi ICD, Incoterms 2020 |
| Seller brings goods | Already there — your factory | On your truck to the ICD, CFS or airport |
| Loading the buyer's vehicle | Seller loads; risk stays with seller during loading | Buyer unloads from your truck; handover is ready-for-unloading |
| Delivery completes when | Goods loaded on buyer's truck | Goods at carrier's disposal, ready for unloading |
| Risk transfers | After loading at your gate | At the terminal, before the vessel sails |
| Export clearance | Seller | Seller |
If the buyer never nominates a carrier or a precise point inside the named place, the seller may select the point that best suits its purpose — but do not rely on that fallback. Agree the bay, the depot and the date window in writing so the truck, the CHA paperwork and the Let Export Order line up on the same day.
FCA vs EXW — the two duties that change everything
FCA at your factory looks almost identical to EXW at your factory — same gate, same truck, same buyer-paid freight. The difference is two seller duties EXW lacks: you load the collecting vehicle, and you clear export customs. Those two duties are precisely the two jobs a foreign buyer cannot do from abroad.
| Question | EXW | FCA |
|---|---|---|
| Who loads the collecting vehicle? | Buyer, at buyer risk | Seller at own premises, risk with seller during loading |
| Who clears export customs? | Buyer | Seller |
| Where does risk transfer? | When placed at disposal, before loading | After loading (premises) or at terminal handover |
| Who arranges main freight? | Buyer | Buyer |
| Who arranges insurance? | Buyer | Buyer |
| Who clears imports and pays duties? | Buyer | Buyer |
| ICC guidance for cross-border sales | Discouraged — use FCA | Recommended alternative |
If you already load the buyer's truck with your forklift under an EXW contract, you are performing FCA work on EXW risk allocation — the worst of both terms. Either stop loading, or re-paper the deal as FCA and own the loading properly with the risk rule that matches it.
Coming from an EXW quote?
Read the EXW deep-dive first — seller limits, the loading trap, the India export-clearance problem and a Jaipur-to-Hamburg walkthrough — then come back and quote FCA with confidence.
Read EXW Ex Works explained →Who does what under FCA — the full split
Check any FCA quotation against this table. Your price stops at the handover; the buyer's budget starts there.
| Task or cost | Seller | Buyer |
|---|---|---|
| Goods + export packing | Seller | — |
| Loading at seller's premises (variant a) | Seller | — |
| Inland transport to terminal (variant b) | Seller | — |
| Export customs clearance (Shipping Bill, LEO) | Seller | — |
| Handover to carrier at named place | Seller | — |
| Main ocean or air freight | — | Buyer |
| Cargo insurance | — | Buyer |
| Destination port charges | — | Buyer |
| Import clearance + duties and taxes | — | Buyer |
| Final delivery to buyer premises | — | Buyer |
Inland transportation therefore depends on the variant: under FCA at your factory there is none on your side beyond the gate; under FCA at a terminal you fund the factory-to-ICD leg and the buyer funds everything after handover. Price the two variants differently — they are different cost promises.
Example 1 — FCA at the seller's factory
A bicycle-parts maker in Ludhiana agrees FCA Ludhiana Factory, Incoterms 2020 with a buyer in the Netherlands for palletised spares. The seller packs, completes checking and weighing, files the Shipping Bill through its CHA on ICEGATE, and on the agreed date loads the buyer's forwarder truck with its own forklift — risk during that loading sits with the seller.
Once the pallets are on the truck, delivery is complete. The buyer's forwarder hauls to Mundra, handles terminal steps, books ocean freight to Rotterdam, and the buyer insures, clears EU import and trucks to its warehouse. If a pallet is damaged during the seller's loading, it is the seller's problem; if the container is damaged at sea a week later, it is the buyer's — risk transferred at the factory gate after loading, not at arrival.
Why this beats EXW for the same gate
The truck, the gate and the freight control are identical to EXW — but the loading risk rule matches who actually loads, and the Shipping Bill sits with the Indian IEC holder who can legally file it. The buyer's experience is smoother and your GST export proof is automatic.
Example 2 — FCA at a nominated freight terminal
A home-textile exporter in Panipat agrees FCA Delhi ICD, Incoterms 2020 with a UK buyer for two stuffed containers. The seller trucks the sealed containers to the inland container depot, files export clearance through its CHA, and places the containers at the carrier's disposal — ready for unloading from the seller's trailers. Delivery completes at the depot, days before any vessel sails.
From handover the buyer owns every next step: rail or road to Mundra, ocean freight to Felixstowe, insurance, UK import clearance with a UK EORI, duties, and final delivery. Risk transferred at the ICD — if the vessel later sinks, the buyer's insurance answers, even though the seller never touched the ship. That early risk cut-off is exactly why FCA fits containerised cargo better than terms whose risk point assumes loading over a ship's rail.
For container shipments this variant is the technically correct choice. FOB and CIF were written for bulk loaded directly onto a vessel; a box handed to a carrier at an ICD days before sailing sits outside their logic. FCA names the real handover — the depot — instead of pretending delivery happens at the ship's rail.
See the full Incoterms map
FCA is one of 11 terms. Compare it against EXW, FOB, CIF and DAP — risk points, cost splits and the container-vs-bulk rules — before you lock the contract wording.
Read the Incoterms 2020 guide →Financing implications — factoring, LCs and the on-board B/L
FCA shapes financeability in three ways. First, the clean one: your Shipping Bill and export documents sit with you, so post-shipment finance — factoring on open account, LC negotiation — rests on documents you control. Confirm who produces the Shipping Bill before shipment and your finance trail stays intact.
Second, the LC trap to defuse. Most LCs demand an on-board bill of lading, but FCA terminal handover yields a received-for-shipment document first; the on-board notation arrives only after vessel loading, days after your delivery is complete — and the carrier issues documents to the buyer, with whom it contracted, not to you. Incoterms 2020 answers this with the A6/B6 option: the parties agree the buyer instructs its carrier to issue an on-board bill of lading to you after loading. Three conditions make it work in practice: write the agreement into the sale contract, mirror it in the LC's document requirements, and confirm the forwarder accepts the instruction — the carrier is not compelled to comply.
- Open account plus factoring: FCA invoices factor cleanly — buyer-country appetite and invoice quality decide, and your export proof is already in hand.
- LC shipments: add shipment-date buffers (delivery date vs on-board date differ), keep the named port broad where possible, and require the carrier to deliver the B/L to you within days of sailing.
- Insurance mismatch: FCA never obliges you to insure — if the LC calls for an insurance certificate, that term needs CIP or CIF, not FCA.
- Freight notation: under FCA the buyer pays freight, so the transport document typically shows freight collect — an LC demanding freight prepaid contradicts the term.
When should you choose FCA instead of EXW?
Simple recommendation: choose FCA whenever the goods cross a border. That covers nearly every export you will ever quote. FCA gives the buyer the same freight control EXW promised, while keeping loading and export clearance with the party that can legally perform them — you. Your price rises by loading plus clearance and one inland leg at most; your deal-closure rate, GST trail and LC compatibility rise by far more.
- Buyer has its own forwarder but no India customs setup → FCA at your factory.
- Containerised cargo moving via ICD or CFS → FCA at the terminal.
- LC payment with container shipment → FCA plus the on-board B/L agreement in the contract.
- Domestic sale to an Indian trading house handling its own export → EXW is acceptable.
- Buyer with confirmed forwarder and CHA in India explicitly requesting EXW → EXW is acceptable, with loading risk agreed in writing.
Default quotation for a new container buyer: FCA nearest ICD, Incoterms 2020, with the on-board B/L clause where an LC is involved. It is precise, bank-friendly, and keeps every document you need for finance and compliance in your own hands.
Structure payment with the term
Once FCA is fixed, fix how you get paid — advance, LC or factoring. Compare the four post-shipment routes and check which ones your buyer market supports.
Compare factoring vs LC discounting →Frequently asked questions
What is FCA (Free Carrier) in Incoterms 2020?
FCA means the seller delivers goods to the buyer's carrier or nominated person at a named place, cleared for export. There are two variants: at the seller's premises, delivery completes when goods are loaded onto the buyer's vehicle; at any other named place (terminal, ICD, airport), delivery completes when goods on the seller's vehicle are placed at the carrier's disposal, ready for unloading. Risk transfers at that handover point. It works for any transport mode and is published by the ICC under Incoterms 2020.
Where exactly do delivery and risk transfer under FCA?
At the named place and point you write into the contract. FCA Ludhiana Factory, Incoterms 2020 means risk transfers once the container is loaded on the buyer's truck at your gate. FCA Delhi ICD, Incoterms 2020 means risk transfers when your truck arrives at the inland container depot and the goods are at the carrier's disposal, ready for unloading. Name the precise point — factory bay, ICD, CFS, airport terminal — because that point is both the risk cut-off and the cost cut-off.
What is the difference between FCA and EXW?
Two seller duties: loading and export clearance. Under EXW the buyer loads at buyer risk and clears exports themselves; under FCA at your premises you load with risk on you during loading, and in both FCA variants you clear export customs. Everything after handover — main freight, insurance, import clearance, duties — sits with the buyer under both terms. ICC guidance recommends FCA over EXW wherever goods cross a border, because a foreign buyer generally cannot file export declarations in the seller's country.
Who handles export customs clearance under FCA?
The seller. You file the Shipping Bill on ICEGATE via your CHA, obtain Let Export Order, and keep the export proof that supports zero-rated GST treatment under LUT and incentive records. This is the single biggest practical reason Indian exporters should prefer FCA over EXW: the Indian entity that can legally clear exports does so, instead of a foreign buyer who has no IEC and no standing before Indian customs.
Who pays international freight and insurance under FCA?
The buyer. Under FCA the buyer contracts and pays main carriage from the handover point and arranges insurance if they want it — you have no obligation to insure. Your FCA price therefore covers goods, export packing, inland haul to the named place (in the terminal variant), loading where applicable, and export clearance — then stops. Import clearance, duties, taxes and final delivery are also the buyer's.
Does FCA work with letters of credit?
Yes, with one condition agreed upfront. Most LCs call for an on-board bill of lading, but FCA handover at a terminal produces a received-for-shipment document first — the on-board notation comes days later when the vessel loads. Incoterms 2020 FCA A6/B6 lets the parties agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller after loading. Put that agreement in the sale contract and mirror it in the LC wording; note the carrier is not compelled to comply, so confirm the forwarder accepts the instruction before shipment.
When should an Indian exporter choose FCA instead of EXW?
Choose FCA whenever the goods cross a border — which is almost always. FCA keeps export clearance and loading with you (legally executable, GST-proof retained) while giving the buyer the same freight control EXW promised. Reserve EXW for domestic sales to Indian trading houses or buyers with a confirmed forwarder plus customs agent in India. For containerised sea cargo, FCA at your nearest ICD is the technically correct term; FOB continues to work in practice but was designed for bulk loaded over the ship's rail.