Free on Board (FOB) is an international trade term (Incoterm) defined by the International Chamber of Commerce that specifies the point at which the seller's responsibility and cost obligation for a shipment ends and the buyer assumes ownership, risk, and further transport costs — namely, when the goods have been loaded on board the designated vessel at the named port of shipment. Under FOB terms, the seller is responsible for all costs and risks up to and including loading the goods onto the ship; once the goods are on board, the buyer bears all subsequent freight, insurance, and delivery costs. FOB is one of the most widely used Incoterms in international trade, particularly for ocean freight. In India, export and import invoices frequently specify FOB values, which form the basis for customs duty assessments and export incentive calculations. For investors on Ventura Securities analysing export-oriented companies — in sectors including engineering, chemicals, textiles, and gems and jewellery — understanding FOB pricing and trade terms provides important context for interpreting reported revenues, cost structures, and the competitive economics of international trade contracts.
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