This concept of entrepot trade popped up in international market mainly because of higher dependency on transshipment of cargo in Singapore, Hong Kong and Dubai.The external trades of these countries are 90% dependent on transshipment which has played a leading role in their economic boom.

Entrepot trade is of the kind of external trade. It is basically a trade in which imported goods are re-exported with or without any additional processing or repackaging.Entrepot is mainly used to refer to duty-free ports with the high volume or re-export trade. At entrepot, goods do not face any import and export duties upon shipment from the port. In simple terms, it can be said that if goods are imported from one country with the purpose of re-exporting to another, it is called Entrepot trade. In this situation the trader becomes the consignee who imports and is also the exporter at the moment of the re-exporting to the third party country where the goods will be ultimately received.

For example, if an Indian company imports rubber from Thailand and exports it to Japan then it is called Entrepot trade for India. Now the question arises, why India comes between Thailand and Japan. Why doesn’tJapan directly imports rubber from Thailand. Here we will see some of the reason for the entretrade transport.

1

The benefit of the entrepot in the past was that it removed the need for ships to travel the whole distance of the shipping route. The ships would sell their goods to the entrepot and the entrepot would in turn sell them to another ship, removing the large risks associated with long distance travel in the past.

Some of the features of entrepots are no import duty on goods, goods are processed and re-packed for export and such goods are kept in the bonded warehouses till they are re-exported. Because of favorable trade conditions, profit is possible in entrepot trade. For example, ships hesitating to travel the entire length of a long trading route can sell it to the entrepot.

The profits are earned by a two-way payment mechanism by the process of import and re-exporting. In this trade there is a big advantage to the trader as he is being relieved out of the import duty, by which the value addition to the cargo will only be permitted on bonded warehouse facilities under the supervision by the customs.This facility in the trading business will open up a huge potential of the country in the global market by trading products of other countries in order to generate more revenue based on external resources of the country and to promote the allied services for employment generation. Entrepot trade will provide the country with a relatively easy method of earning foreign exchange either by value addition or by re-exporting at a higher value.Narcotics, arms and ammunitions are usually not permitted to import under “Entrepot Trade”.

2

Important Entrepot Hubs

HongKong:Hong Kong is world’s largest entrepot economy. The special administrative of China is located to the east of the Pearl River (Xu Jiang) estuary on the south coast of China. It is an established entrepot between the world and China and leading in world for its Entrepot trade. Hong Kong is a good example of a free market entrepot economy which facilitates trade in the pacific region and between China and the rest of the world. As Hong Kong relies mainly on exports, it has become successful and gained a global importance in the international trading arena.

Dubai:Entrepot contribute about 15% share to the Dubai’s economy.Dubai is also among the leading hubs experiencing continuous growth on the entrepot trade. The hub is practicing an open door policy and extended facilities to international trading. Dubai is a brilliant transit point that connects Africa so well to Asia and Europe. The difficulty in direct connectivity with Africa is that Africans face difficulties in securing visas to travel elsewhere on the continent, while foreign businessmen travelling into Africa can also face bureaucratic headaches. Dubai is tax-free which wins the country in terms of Ease of Doing Business. Dubai sustains services to remote locations, allowing people to come to it and fan out to 260 destinations. Dubai is a catalyst for growth of trade between African nations and the rest of the world.

Singapore:Singapore, city-state located at the southern tip of the Malay Peninsula, about 85 miles (137 kilometres) north of the Equator. It consists of the diamond-shaped Singapore Island and some

3

60 small islets; the main island occupies all but about 18 square miles of this combined area. Singapore is the largest port in Southeast Asia and one of the busiest in the world.Singapore’s market economy is highly based on market economy. Singapore is the 14th largest exporter and the 15th largest importer in the world.The country has the highest trade-to-GDP ratio in the world at 407.9 percent, signifying the importance of trade to its economy.Singapore also rank 1st globally for trading across borders in ‘Ease of Doing Business Ranking’ by World Bank.Entrepot trade accounts for about one-third of Singapore’s export trade.

Indirect trade like Entrepot has been growing more than three times faster than world trade as a whole. There are more than thirty countries that are involved in a significant amount ofindirect trade. Macao SAR, Cyprus, Fiji, Senegal, Jordan, Armenia, Seychelles, Honduras, Benin,Montserrat, and St. Lucia are some of the other prominent entrepôts through which indirect trade takes place. This entrepot trade provides the opportunity to trade to many inaccessible country which boost the globalization all around the world.

4

Keywords:

Entrepot, commerce, trade, export, import, duty, re-packed, re-exported, ports, Dubai, Singapore, Hongkong, Fort Orange, Ease of Doing Business, Macau, Cape of Good Hope, Port of Keelung, world,

Ref:http://www.businessdictionary.com/definition/entrepot.html#ixzz3WiLCAvfShttp://www.investopedia.com/terms/e/entrepot.asp#ixzz3WiSTXyUxhttp://download.nos.org/srsec319new/319EL23.pdfhttp://www.ft.com/intl/cms/s/0/30fb31dc-37d6-11e3-8668-00144feab7de.html#axzz3WnVGJRvAhttp://www.ft.com/intl/cms/s/0/30fb31dc-37d6-11e3-8668-00144feab7de.html#axzz3WnVGJRvAhttps://www.imf.org/external/pubs/ft/wp/2005/wp05102.pdfs

5