FOB (Free On Board) price is the total cost of a garment at the factory's export port, including fabric, CMT cost, trims, and local freight to port. It does not include international shipping, import duties, or last-mile delivery to your warehouse. When a factory quotes you "FOB Mumbai" or "FOB Tirupur," they're responsible for everything up to the ship's rail — you take it from there.
At Greige, the garment sourcing platform, every quote we provide includes a full FOB breakdown plus landed cost estimates so brands know the real number before committing. Here's what FOB means, what's typically included in an Indian FOB quote, and when to use FOB vs other pricing terms.
What's included in an FOB price
An FOB price from an Indian garment factory covers:
- Fabric — sourced by the factory (in full-package production) or supplied by the brand (CMT)
- Trims — buttons, zips, thread, labels, hangtags
- Cut, Make, Trim (CMT) — factory labour cost
- Packaging — polybag, carton, inner packaging
- Local freight — from the factory floor to the export port
- Export documentation prep — shipping bill, certificate of origin
Not included in FOB:
- International ocean or air freight
- Import duties and customs clearance fees
- Last-mile delivery
- Your freight forwarder's fee ($150–300 typical)
- Currency conversion costs
The moment the goods are loaded onto the vessel at the port of origin, risk and responsibility transfer from the seller to the buyer. That's what "Free On Board" means operationally.
India FOB price benchmarks (2026)
These are Greige's operational benchmarks from orders placed in 2025–2026 (data source: Greige production records, confidence: HIGH).
| Garment type | Order size | FOB price range (USD/unit) |
|---|---|---|
| Basic jersey T-shirt | 500+ units | $1.00 – $2.50 |
| Basic jersey T-shirt | 100–299 units | $1.80 – $3.50 |
| Classic relaxed hoodie | 100 units | ~$5.80 (fabric + trims + CMT) |
| Woven shirt (simple) | 300 units | ~$6.65 (fabric + trims + CMT) |
| Woven shirt (simple) | 300 units | ~$7.94 sea-freight landed (ex-duties — add 8–32% of FOB for US import duty depending on HTS code) |
The hoodie example above is a real order: Apex Textiles, Tirupur, March 2026, 100 units — $5.80 FOB, landing at approximately $9.61/unit via air freight. The difference between FOB and landed is where most brands get surprised.
Practical note: FOB prices for the same style can vary 20–40% between factories quoting the same spec. The variables are fabric sourcing relationships (factory-preferred mills vs. open-market sourcing), labour efficiency (experienced line vs. new style), and order volume amortisation. Getting 3 quotes for any style over $5 FOB is always worth it.
FOB vs DDP vs EXW: which should you use?
Three pricing terms cover most garment sourcing transactions:
| Term | Who pays freight + duties | Risk transfer | Best for |
|---|---|---|---|
| FOB | Buyer pays everything from port of origin | At port of origin | Brands with a freight forwarder, orders 500+ units |
| DDP (Delivered Duty Paid) | Seller handles freight + duties, delivers to warehouse | At buyer's warehouse | First-time importers, small orders, brands without logistics infrastructure |
| EXW (Ex-Works) | Buyer pays everything from factory floor | At factory | Brands with strong freight infrastructure and agents on the ground in India |
DDP is usually better for small brands ordering under 500 units per style. The freight and customs coordination overhead of FOB — freight forwarder fees, customs broker, duty payments — adds complexity and cost that isn't worth managing at low volumes. A factory or trading company offering DDP pricing has already baked the logistics margin in; you pay more per unit but you get one invoice and one delivery. DDP typically runs 30–50% above FOB for sea freight (accounting for a range of duty rates from 8–32% depending on HTS code), and significantly higher for air — the exact premium depends on duty rate, freight method, and your forwarder's margin.
Switch to FOB when: you're ordering 500+ units regularly and have a trusted freight forwarder. At scale, managing freight directly can save meaningfully on the logistics component vs. DDP — the premium varies by freight method and duty rate.
Avoid EXW unless you have a freight agent physically based in India. EXW transfers all risk at the factory — if the truck breaks down before the port, that's your problem.
The hidden cost most brands miss: currency risk
An Indian factory quotes FOB in USD. The actual production costs — labour, local fabric, factory overhead — are in Indian Rupees. When the INR strengthens against the USD, the factory's margin compresses. This occasionally triggers a factory to re-quote mid-production ("the fabric cost has increased") or cut corners to protect margin.
The fix: get your FOB quote locked in writing with the exchange rate reference date. Greige's contracts lock the FOB rate at order confirmation. If INR moves more than 3% between order and shipping, we negotiate with the factory directly — the brand doesn't renegotiate.
FAQ
What is FOB price in clothing manufacturing? FOB (Free On Board) price is the total cost of a garment at the factory's port of export, including fabric, CMT, trims, and local freight to port. It does not include international shipping, import duties, or last-mile delivery. FOB is the standard pricing term when sourcing from India or China.
What is the difference between FOB and DDP in garment manufacturing? FOB is the garment cost to the export port — the brand pays international freight and import duties separately. DDP (Delivered Duty Paid) is an all-in price delivered to the brand's warehouse. DDP typically runs 28–45% above FOB for sea freight (more for air), but removes logistics complexity for small brands.
Is FOB or DDP better for small fashion brands? DDP is usually better for small brands ordering under 500 units per style. The freight and duty coordination overhead of FOB is not worth the per-unit saving at low volumes. Brands ordering 500+ units per style regularly should switch to FOB and use a freight forwarder.
What does a typical India FOB price include? Fabric, CMT (Cut, Make, Trim) labour, trims, packaging, local freight to port, and export documentation. It does not include international shipping, import duties, or your freight forwarder's fees. At Greige, FOB quotes are always broken into line items so brands can see exactly what they're paying for.
How do I calculate landed cost from an FOB price? Landed cost = FOB price + international freight + import duty + freight forwarder fee + any last-mile delivery. For a woven shirt at $6.65 FOB, add $0.40–$0.80 sea freight, duty at your HTS code rate (verify at usitc.gov), and $150–300 forwarder fee spread across the shipment. The full landed cost is typically 30–65% above FOB depending on duty rate and freight method.
Sea freight from India to the US takes 21–28 days on top of your FOB date — factor this into your production timeline planning before you commit to a launch date.
FOB is the standard. Know what it includes, what it doesn't, and when to ask for DDP instead. The brands that get surprised by landed costs are the ones who planned on the FOB number and forgot about everything that happens after the goods hit the ship.