➡️ No, cost recovery is generally not considered repatriation under the Annual Performance Report (APR) for Overseas Direct Investment (ODI) purposes — unless it is structured as income (e.g., service revenue, royalty, dividend).

📘 RBI/FEMA Context:

The APR requires disclosure of:

• Repatriation of profit/income (dividends, royalties, interest, etc.)
• Loan repayments
• Other remittances (if any)

But cost recovery — such as reimbursement of:

• Shared service expenses
• Employee secondment costs
• Software/license recharge
• Back-office support

— is not classified as “profit repatriation”, because it is not a return on investment.

🟡 RBI View (As practiced by AD Category-I Banks):

🔸 However, RBI expects transparency. Cost recoveries should be disclosed in the “Remarks” or “Other inflows” section of the APR.

📝 Best Practice for APR Disclosure:

APR Repatriation Field:

• Leave blank or zero for cost recovery — do not club it with “repatriated profit”.

Remarks Section:

“During the year, the Indian parent received ₹X lakhs from its foreign subsidiary towards cost recovery for IT services and shared management resources. This does not represent profit or return on investment.”

⚠️ Important:

• If you invoice your subsidiary and earn a margin or profit (i.e., it’s not a pure reimbursement), it may be treated as income and should be disclosed accordingly.
• Supporting documents (like intercompany agreement, cost-sharing terms) should be maintained for clarity.

✅ Summary