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Re-export is the export of goods to the same destination from where it has been previously imported from. For instance, if there are machine parts imported into a country for testing purposes, and after necessary testing, the machine parts are sent back, the procedure is called re-export.
Re-export does not contribute to the value of a country’s overall revenue and hence is subtracted from the total exports annually. Although the re-export of goods is mostly done to the same country from which are imported, it can also be done to other countries as well.
Most countries indulge in re-export due to various reasons.
Occasionally, imported goods are sent back to the origin country if any of the imported product’s parts need repair. Sometimes, re-exporting is done if the export-import contract between two parties is terminated due to numerous reasons such as political disruptions and shortage of items produced in the origin country, among others.
At other times, the re-export of goods is done if the importing country is a middle ground for the export trade between two nations, and the receiver denies picking up the goods while they’re in transit.
A country’s exports are distinguished into two categories – exports of domestic goods and exports of foreign goods. Most commonly, the export of foreign goods is what re-export comprises of. While re-export doesn’t directly contribute to a business’s sales, it is the only form of export that requires no payment of basic customs duty and IGST. Re-export is not generally opted in global trade unless there are situations in which the imported products are to be returned to the originating country.
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