Mumbai (127) is the costliest city in India for expats in terms of both living expenses and accommodation costs followed by New Delhi (155), Chennai (177), Bengaluru (178), and Hyderabad (192) while Pune (201) and Kolkata (203) are the least expensive in the ranking, reveals Mercer's 2022 Cost of Living survey.
The survey, conducted in March 2022, also found that while Mumbai, the financial hub of India, is a popular place for multinational corporations to establish operations, organisations are also considering other low-cost areas like Hyderabad, Chennai, and Pune due to the greater cost of living in the city.
This year's ranking compares the prices of more than 200 commodities including housing, transportation, food, clothing, household goods, and entertainment in 227 cities spread across five continents.
Mercer revamped its cost-of-living methodology this year with new items such as smartwatches, tablet computers and smartphones added to the basket and non-relevant items such as music CDs and video movie rentals removed.
The study highlights elements that contribute to daily costs, for example among the assessed Indian cities, Kolkata has the lowest cost of daily necessities such as milk, breads and vegetables among others, while Mumbai and New Delhi have the highest costs.
In terms of energy, phone costs, etc, the cost of home utilities is highest in Mumbai and lowest in Chennai and Hyderabad. Watching a movie in Mumbai is most expensive whereas Hyderabad is the cheapest.
“Global supply chains for necessities have been disrupted as a result of COVID-19-related volatility, which has been exacerbated worse by the conflict between Ukraine and Russia. As a result of this uncertainty, organisations have been forced to revaluate their global mobility initiatives with a focus on the well-being of their expatriate employees, balanced with economics, along with significantly growing inflation in the majority of countries around the world,” said Rahul Sharma, India Mobility Leader, Mercer.
Furthermore, Hyderabad had the cheapest housing of all the places examined in India when evaluating the country's housing market. However, Hyderabad is more expensive than Pune and Kolkata when both cost of living and housing are taken into account.
Among other Indian cities, Mumbai has some of the costliest rentals, followed by New Delhi and Bangalore. The other Indian cities in the ranking (Chennai, Hyderabad, Pune, and Kolkata) have accommodation costs that are over 50% lesser than those of Mumbai.
“Additionally, we have seen that petrol costs have increased in all Indian cities. Also, the price of getting a new car and other maintenance costs have gone up in all Indian cities,” Sharma added.
Given challenges of cost considerations and complexity of operating globally in today’s volatile environment - re-examining, reinventing talent mobility programmes is imperative to the future talent programme agenda, the survey stressed.
This could comprise applying newer economic models, using more distributed talent workforces leveraging through access to right information for location and other assessments into the talent mobilisation decisions, as critical factors for mobility programmes.
For instance, it is not surprising that India is re-emerging to be among the contenders to relocate and setup operations for manufacturing or captives, given advantages of skill availability, relative cost competitiveness and attractiveness for mobilising executives to conduct business in select cities.
As compared to other major cities in Asia Pacific region, including Beijing, Shanghai and Manilla, Indian cities including Mumbai and New Delhi have a lower cost of living and expat accommodation, making it a cost-efficient destination for global MNC’s to setup operations overseas.
Four out of 10 most expensive cities to live in for the international assignees are located in Asia, including the single most expensive city in the world – Hong Kong, SAR (ranked 1). Singapore (8), Tokyo, Japan (9) and Beijing, China (10) are all on the top 10.