Outward processing refers to the customs procedure of exporting goods for processing or work abroad and reimporting the final products.
Key Characteristics:
- Partial or complete processing/manufacturing is done outside the customs territory.
- Imported goods are not intended for sale in the processing country.
- Processed goods may qualify for duty exemption or preferential tariffs on reimport.
Example:
A garment manufacturer from India sends fabric cut panels to Bangladesh for embroidery work before export.
Significance:
Outward processing allows businesses to leverage cost and skill advantages abroad while retaining ownership. It supports global production networks through cross-border value addition.