Mumbai costlier for foreigners than Frankfurt, Atlanta, finds survey

City ranks 55th in cost of living study; Hong Kong, Tokyo and Zurich most expensive cities for expatriates to live in

Mumbai, Delhi, Chennai, Kolkata and Bengaluru rank highest among Indian cities in terms of cost of living for foreign nationals in Mercer’s annual survey.

Within India, Mumbai continues to be the most expensive city for expatriates and has moved up two spots to 55 from last year. It ranks higher than cities like Melbourne (58), Frankfurt (68) Buenos Aires (76), Stockholm (89) and Atlanta (95). According to the 2018 Cost of Living survey, Hong Kong is the world’s costliest city for expatriates to live in, followed by Tokyo and Zurich. Luanda, the capital of Angola, which was the world’s most expensive city last year, has been relegated to sixth position this year.

Rising costs

Mumbai’s jump in ranking is due to a surge in prices of food, alcohol and domestic supplies. Inflation remained at 5.57% for the surveyed set of goods, which included food items such as butter, meat and poultry, premium farm produce, and wine.

“Costs of sporting, leisure-related activities have also played a role [in] rising prices, followed by transportation costs, which include taxi fares and cost of registration and road taxes. Real estate prices in Mumbai remain among the highest in the world for residential purposes,” Mercer said.

Meanwhile, Delhi 1managed to claw its way out of the top 100, dropping four positions to 103. It has shown a relative increase in cost of living due to a rise in prices of transportation and sports- and leisure-related services. Chennai, at 144, has dropped nine spots compared to last year — the steepest drop among Indian cities. Prices of alcohol and clothing remained on the higher side in the Tamil Nadu capital.

Bengaluru is ranked 170, and has dropped down the index since last year, a fall driven significantly by a relative drop in transportation prices, which include taxi fares, cost of auto and auto parts, and running costs. Kolkata at 182 remains the least expensive among the surveyed Indian cities, though it has moved up two spots due to an increase in costs of domestic supplies and home services.

Padma Ramanathan, India practice leader, global mobility, at Mercer, said, “Nearly 93% of companies do compensate through a cost of living allowance for their expatriate assignees. This increase in prices of goods in our cities, viewed along with currency exchange rate, has a direct impact on the Indian assignee compensation … In this scenario, companies are reconsidering how frequently expatriate salaries are reviewed.”

The survey measured the comparative cost of more than 200 items, including housing, transportation, food, clothing, household goods, and entertainment.