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Sourcing from India to Chile: calculate landed cost before comparing quotes

A practical worksheet for comparing Indian supplier quotes on the same Incoterms, customs, origin, tax, and delivery basis in Chile.

Founder & Commercial Director · Santiago, Chile

The lowest unit price can produce the highest cost at the buyer’s warehouse. Supplier quotes become comparable only after the product, quantity, delivery point, excluded charges, and tax treatment use the same assumptions.

Normalize the product and commercial basis

Start with the same specification revision and buying quantity for every supplier. Record:

  • Product code, material, dimensions, tolerance, performance requirement, labels, and packaging
  • Order quantity, units per carton or pallet, gross weight, volume, and expected shipment count
  • Currency, payment schedule, quote validity, production lead time, and warranty
  • Factory, invoicing entity, exporter, and bank beneficiary
  • Sample, testing, inspection, tooling, mould, or artwork charges

A lower unit price based on a different material, thinner packaging, larger minimum order, or separate tooling fee is a different offer. Keep each deviation visible instead of averaging it into one number.

Write the Incoterms rule with a named point

Terms such as FOB India or delivered Chile leave costs and risk open. The International Chamber of Commerce recommends writing the chosen rule, named port, place or point, and Incoterms 2020 in the contract, according to its official guidance.

The rule allocates delivery, risk, carriage, insurance, clearance, and defined costs between seller and buyer. It does not set the payment method, transfer of ownership, product acceptance, remedies for defects, or applicable law. Put those points elsewhere in the purchase contract.

For each quote, mark the exact location where the supplier’s cost ends. Then ask who pays each origin charge, international leg, destination charge, and inland movement. Confirm the carrier’s quotation uses the same route, equipment, weight, volume, free days, and destination terminal.

Build the cost line by line

Use one currency and one unit of comparison. Keep these lines separate:

  • Goods and packaging under the agreed Incoterms rule
  • Origin pickup, export handling, documentation, and terminal charges not included by the seller
  • International freight, insurance, and any transhipment cost
  • Customs-value adjustments
  • Customs duty under the applicable tariff line and origin treatment
  • Import VAT and any product-specific tax or fee
  • Customs broker, inspection, certification, permits, storage, and terminal charges
  • Delivery from the port or airport to the final warehouse
  • Bank charges, financing cost, and exchange-rate assumption
  • Expected loss from minimum order, breakage, rejects, or unusable stock

Show recoverable taxes separately only after the buyer’s accountant confirms the treatment. Cash paid at import and final economic cost are different views of the same shipment.

Reconcile the customs and tax bases

The supplier’s invoice total does not always equal the Chilean customs value. Chilean Customs’ Resolution 212/2020 on valuation states that customs value includes transport to the place of entry, related loading, unloading and handling during that transport, and insurance.

Article 16(a) of Chile’s VAT law published by SII sets the import VAT base as the customs value, or the CIF value when applicable, and adds customs charges caused by the import. Ask the customs broker and accountant to confirm the current calculation for the exact product and importer before approving the purchase order.

Keep the evidence used for every line: supplier invoice, packing data, freight quotation, insurance, tariff classification, tax calculation, and destination tariff. A landed-cost number without dated evidence cannot be checked when the shipment changes.

Count a tariff preference only after origin is cleared

The Chile–India Partial Scope Agreement does not cover every tariff line under one rate. SUBREI’s agreement page publishes the covered product lists, product-specific origin rules, and proof-of-origin documents, and states that certification is issued by an authorized entity.

Before applying a preference in the worksheet, confirm:

  • Chilean tariff classification tied to the approved product description
  • Preferential rate for that exact line
  • Product-specific origin rule
  • Factory inputs and production that support the origin claim
  • Issuing entity, document format, dates, and consistency with the invoice and shipment

If any point is pending, show the normal-duty case beside the preferential case. Do not use the better number as the purchase approval baseline.

Compare the landed cost at the same destination

Use a named warehouse or site in Chile as the endpoint. Divide the total by the number of usable units expected to arrive there. Run a second case for the variables most likely to move, such as freight, exchange rate, storage time, or rejected quantity.

The final comparison should show the supplier, specification revision, quantity, Incoterms rule and named point, route, tariff line, origin status, evidence date, landed cost per usable unit, cash required before delivery, and unresolved assumptions. A reviewer can then see why one quote is cheaper and what could reverse the decision.

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Next step

If you are comparing Indian suppliers for delivery in Chile, discuss your sourcing case. Bring the specification, quotes, packing data, and intended delivery point so the unresolved assumptions can be listed before supplier selection.

Insights contain general business information and do not constitute legal, tax, customs, regulatory or technical advice.