Trade Glossary
A practical import-export glossary for buyers, sourcing teams, suppliers, inspectors, freight forwarders, and customs partners working on India sourcing programs.
At A Glance
A trade glossary helps importers, sourcing teams, suppliers, inspectors, freight forwarders, and customs brokers use the same language when planning a purchase order. For India sourcing, this reduces confusion around quotations, samples, MOQ, Incoterms, inspection scope, export documents, landed cost, and shipment handoffs.
Most sourcing errors start with unclear terms: what is included in price, who books freight, which sample is approved, what inspection standard applies, and which documents are required before cargo moves.
Use this glossary before RFQs, supplier comparison, sample approval, pre-shipment inspection, freight booking, and customs documentation.
Buyer Questions
Trade terms define price scope, production expectations, inspection criteria, shipping responsibility, documentation duties, and customs exposure. If the buyer and supplier use terms differently, cost, quality, and delivery risk increase.
MOQ, EXW, FOB, CIF, DDP, HS code, CBM, gross weight, volumetric weight, freight mode, duty, insurance, and destination delivery all affect landed cost.
Confirm specifications, approved sample, MOQ, lead time, packaging, inspection standard, Incoterm, payment schedule, export documents, and shipment handoff before production begins.
Importers, procurement teams, DTC brands, marketplace sellers, retailers, quality teams, freight partners, and supplier coordinators should use the same glossary during India sourcing.
Glossary
These terms appear during supplier shortlisting, sampling, quotation comparison, inspection planning, and shipment documentation.
A local partner who helps buyers find, compare, verify, and coordinate suppliers. For India sourcing, the role usually covers supplier search, sampling follow-up, factory communication, inspection coordination, and shipment readiness.
A company that manages sourcing and order follow-up for buyers. It is often used in apparel, textiles, home goods, and lifestyle categories where supplier coordination and quality checks are recurring needs.
A supplier that physically produces goods. Buyers should confirm whether the supplier owns production or is only arranging production through another factory.
A supplier that buys from or coordinates with factories instead of manufacturing directly. Traders can be useful, but buyers need clarity on margin, factory control, and quality accountability.
Original equipment manufacturing, where a factory produces goods to a buyer's specification or design. OEM work requires clear drawings, materials, tolerances, packaging, and approval samples.
Original design manufacturing, where the factory already has a product design that the buyer can adapt. Buyers should still confirm customization limits, ownership, and export readiness.
Products made for sale under the buyer's brand. The buyer usually controls packaging, labels, inserts, finish expectations, and quality standards.
A ready product that can be branded with the buyer's name. It is faster than custom development but offers less product uniqueness.
Request for quotation. A strong RFQ includes product specs, quantity, packaging, target Incoterm, delivery expectations, inspection requirements, and compliance needs.
Minimum order quantity. MOQ affects pricing, sampling, packaging, raw material purchase, production planning, and whether a supplier is practical for small-batch or bulk orders.
The time required to produce or prepare an order. Buyers should separate sample lead time, production lead time, inspection time, and shipping time.
A product unit used to judge material, finish, size, construction, function, and packaging before bulk production. Sampling decisions should be documented.
The approved reference sample against which production quality is compared. It should be retained by the buyer, supplier, and inspection team where possible.
Pre-production sample. It confirms the final materials, construction, color, packaging, and workmanship before full production begins.
A detailed product file used in manufacturing. It can include drawings, measurements, materials, trims, labels, tolerances, packaging, and quality requirements.
A concise product requirement sheet. It helps suppliers quote consistently and gives inspectors clear checkpoints for review.
Quality Terms
Use these terms to align what will be checked, when inspection happens, and what counts as acceptable quality.
Acceptable quality limit. AQL defines sample size and acceptance criteria for defects during inspection.
Inspection performed when goods are finished and packed, before shipment release. It helps catch visible quality, quantity, packaging, and labeling issues.
During production inspection. It checks production while the order is still in progress, allowing correction before all units are finished.
A final inspection using randomly selected units from finished production. It is commonly used before shipment approval.
A review of a factory's capability, process, equipment, workforce, compliance posture, and production readiness.
A broader review of supplier identity, operations, documentation, quality systems, export experience, and buyer fit.
A defect that may create safety, legal, or serious usability risk. Critical defects usually require immediate rejection or hold.
A defect likely to affect product use, saleability, or customer acceptance. Too many major defects can fail an inspection.
A small defect that does not usually affect function but may affect appearance or perceived quality.
The acceptable variation in size, color, weight, finish, or construction. Tolerances should be agreed before production.
Corrective work done to fix defects before shipment. Buyers should define whether reinspection is required after rework.
A written checklist of product, packaging, labeling, function, quantity, and workmanship checks used during inspection.
Freight Terms
These terms influence freight quotes, shipment control, delivery timing, and responsibility for cargo movement.
Ex Works. The buyer takes responsibility from the supplier's premises. It gives buyer control but requires strong local logistics coordination.
Free on Board. The supplier is typically responsible until goods are loaded at the named port, while the buyer controls main freight and import steps.
Cost, Insurance, and Freight. The seller arranges ocean freight and insurance to the destination port, but import clearance and final delivery remain buyer concerns.
Delivered Duty Paid. The seller or logistics partner quotes delivery including import duties and final delivery, but buyers must verify what is included.
Full container load. One buyer's cargo occupies the container, making it suitable for larger or more sensitive shipments.
Less than container load. Cargo shares a container with other shipments, which can reduce cost for smaller volumes but adds handling and timing risk.
Cubic meter. CBM measures cargo volume and is used in freight pricing, consolidation planning, and container utilization.
Product plus packaging weight. It is used in freight quotes, packing lists, cargo handling, and customs documents.
Product weight without packaging. It may be needed for product documentation, customs, and category-specific import review.
A calculated freight weight based on parcel or carton dimensions. It is especially important for air freight and courier shipments.
A logistics partner that arranges cargo movement, freight booking, documents, and shipment coordination.
Combining goods from multiple suppliers into one shipment. It can reduce logistics cost but requires tight timing, documents, and inspection planning.
The point where goods move from factory control to forwarder, port, carrier, or buyer control. Handoff responsibility should be written clearly.
Customs Terms
Documentation terms matter because wrong product details, values, weights, or codes can delay clearance or create cost exposure.
Harmonized System code used to classify products for customs. HS codes affect duty, documentation, and import eligibility.
A trade document showing seller, buyer, product description, quantity, value, currency, Incoterm, and shipment details.
A document that lists carton counts, dimensions, weights, product quantities, and packing details for shipment and clearance.
A transport document for ocean freight. It confirms cargo receipt, carrier details, shipping route, and consignee information.
A transport document for air freight. It includes shipper, consignee, routing, cargo description, and tracking details.
A document declaring where goods were produced. It may affect duty treatment, trade preference, or import requirements.
The process of submitting documents and meeting import or export requirements so cargo can legally move across borders.
A tax or tariff charged on imported goods. Duty depends on HS code, origin, product type, value, and destination market rules.
The full cost of goods after product price, freight, insurance, duty, taxes, brokerage, inspection, and final delivery are considered.
Commercial Terms
These terms shape quotation approval, supplier commitment, document control, and payment timing.
A preliminary invoice issued before payment or production. Buyers use it to confirm price, quantity, Incoterm, bank details, and order scope.
A buyer-issued order document defining product, quantity, price, delivery terms, payment terms, and acceptance requirements.
A bank-backed payment method where payment depends on compliant documents. It requires strict alignment between commercial and shipping paperwork.
Telegraphic transfer or bank wire payment. It is common in international trade and often split between advance and balance payment.
Payment made before production or shipment. Buyers should connect advance payment to supplier verification, sample approval, and written order terms.
The remaining payment after deposit. It is often paid after inspection, before shipment release, or against agreed documents.
A payment arrangement where documents trigger or support payment. Document accuracy is critical to avoid release delays or payment disputes.
Buyer Risk
| Term | Used in | Buyer risk if misunderstood |
|---|---|---|
| MOQ | Supplier quotations | Wrong order quantity, weak pricing comparison, or unrealistic launch planning. |
| AQL | Inspection | Unclear pass/fail criteria and disputes after production is complete. |
| FOB | Freight and Incoterms | Confusion over who controls main freight, insurance, and import steps. |
| DDP | Delivered pricing | Assuming duties, customs, or final delivery are included when they are not. |
| HS code | Customs | Incorrect duty estimate, clearance delay, or documentation mismatch. |
| CBM | Freight quotes | Underestimated shipping cost or poor container planning. |
| Commercial invoice | Customs documents | Mismatch between value, product description, Incoterm, or consignee details. |
Related Support
MCR Associates helps buyers turn trade terminology into practical supplier search, verification, inspection, and shipment coordination steps.
Clarify supplier identity, capability, and fit before production commitment.
Translate quality terms into inspection checkpoints and reports.
Coordinate documents, cargo handoff, and shipment planning from India.
Review how shipping responsibility changes under common Incoterms.
FAQ
Importers should understand MOQ, lead time, RFQ, sample approval, AQL, pre-shipment inspection, FOB, CIF, DDP, FCL, LCL, CBM, HS code, commercial invoice, packing list, bill of lading, and landed cost.
A sourcing agent usually supports supplier discovery, verification, sampling, and coordination for a buyer. A buying house often manages broader order follow-up, production coordination, and quality workflows, especially in categories like apparel, textiles, and home goods.
MOQ determines whether the order quantity is realistic and cost-effective. Lead time determines whether production, inspection, freight, and delivery can meet the buyer's launch or replenishment schedule.
EXW, FOB, CIF, DDP, FCL, LCL, CBM, gross weight, volumetric weight, duty, insurance, brokerage, and final delivery all affect landed cost.
MCR Associates helps buyers clarify supplier quotations, product requirements, sample expectations, inspection terms, documentation needs, and shipment handoffs before order movement.
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