The formula
Landed cost = product cost + freight + insurance + customs duties + import taxes + local charges
Product cost plus freight plus insurance is the CIF value. Most countries calculate customs duty on the CIF value.
Worked example: importing into India
A buyer imports goods worth $10,000 (FOB China), with $800 sea freight and 0.5% insurance. Assume 10% basic customs duty and 18% IGST.
| Item | How | Amount |
|---|---|---|
| Goods | FOB value | $10,000.00 |
| Freight | Quoted | $800.00 |
| Insurance | 0.5% of goods + freight | $54.00 |
| CIF value | $10,854.00 | |
| Basic customs duty | 10% of CIF | $1,085.40 |
| Social welfare surcharge | 10% of duty | $108.54 |
| IGST | 18% of (CIF + duty + SWS) | $2,168.63 |
| Total before local charges | $14,216.57 |
Add clearance, port and inland transport charges to get the final landed cost. If you are GST-registered, the IGST can usually be claimed back. In that case the cost that stays with you is about $12,048 plus local charges.
Run your own numbers in the landed cost calculator.
From landed cost to selling price
Divide the landed cost by the number of units to get the cost per unit. Then use the margin calculator to set a price that hits your target margin after platform or distributor fees.
Frequently asked questions
What is included in landed cost?
The product cost, freight, insurance, customs duties, import taxes and local charges such as clearance, port fees and inland transport.
Is GST part of landed cost in India?
IGST is paid at import. If you are GST-registered and eligible, you can usually claim it back as input tax credit, so many businesses track landed cost both with and without it.
