➡️ 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).

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📘 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.

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

Nature of Inflow	Counted as Repatriation in APR?
Dividend from foreign subsidiary	✅ Yes
Interest on loan to foreign subsidiary	✅ Yes
Loan repayment	✅ Yes
Royalty/technical fee	✅ Yes
Cost recovery (reimbursement)	❌ No
Advance settlement for shared services	❌ No

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

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📝 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.”

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⚠️ 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.

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✅ Summary

Question	Answer
Is cost recovery repatriation for APR?	❌ No
Should it be mentioned anywhere in APR?	✅ Yes (in Remarks)
Can it be clubbed with dividends or loan returns?	❌ Not advised
Is documentation required?	✅ Yes (for audit/RBI)

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