Incoterms: Meaning and definition

Incoterms stands for International Commercial Terms, which is a set of standard terms for use in international trade and commerce established by the International Chamber of Commerce (ICC). Incoterms define the rights and responsibilities of importers and exporters involved in international trade transactions. It establishes uniform rules for delivery of goods, allocation of costs, transfer of risk, documentation requirements, transportation obligations, insurance, customs clearance, and point of transfer of risk from the seller to the buyer. These terms are widely used in international contracts to ensure clarity and avoid misunderstandings between parties. Incoterms help streamline global trade operations and facilitate smoother transactions by providing a common language for trade-related negotiations and obligations.