Hong Kong has once again claimed the title of the most expensive city to live in globally, according to this year’s survey by Mercer. Notably, Mumbai has surged 11 places to rank 136th worldwide. The survey also revealed movements for other Indian cities, with New Delhi rising to 164th, Chennai dropping to 189th, Bengaluru slipping to 195th, Hyderabad remaining steady at 202nd, Pune climbing to 205th, and Kolkata moving up to 207th.
Indian Cities' Rankings and Regional Comparisons
Within Asia, Mumbai and New Delhi have experienced upward movement in the rankings. Mumbai has climbed six spots to become the 21st most expensive city in Asia for expatriates, while New Delhi now holds the 30th position in the region.
The resilience of the Indian economy, marked by significant growth driven by domestic demand and a thriving services sector, has positively impacted the cost-of-living in Indian cities. Factors such as employment growth and a rising middle class have contributed to this upward movement. Despite the strengthening of the US dollar against most currencies, the Indian Rupee has remained stable, preventing significant dips in the rankings of Indian cities.
Expert Insights
Rahul Sharma, India Mobility Leader at Mercer, commented on the findings: "In the face of global economic challenges, India has remained largely resilient in our 2024 Cost of Living Survey. Despite Mumbai's rise in rankings, the overall affordability of Indian cities remains a key advantage for multinational organisations or Indian companies looking to attract global talent.”
Sharma further emphasised India’s economic strengths saying, “Our thriving economy, fueled by domestic demand and a robust services sector, offers a stable environment for global talent. As we navigate rising global housing costs and inflation, India's growth story and improving living standards position us as an attractive destination for international assignments."
Cost of Goods Overview in Indian Cities
Personal care items are most expensive in Mumbai, followed by Chennai, while Kolkata offers the lowest prices. Energy and utility costs are highest in Mumbai and Pune. Groceries, including milk, dairy products, bread, beverages, oils, fruits, and vegetables, are most economical in Kolkata, with Pune coming next. Transportation costs are steepest in Mumbai, followed by Bangalore. Alcohol and tobacco are least expensive in Delhi, though costs in Chennai have surged by 20 per cent over the past year. Housing rentals have seen significant increases, particularly in Delhi (12-15 per cent), with Mumbai also experiencing a rise (6-8 per cent), whereas Kolkata has had the lowest change, with less than a 2 per cent increase.
Mercer’s Cost of Living Survey
Mercer’s Cost of Living survey is renowned for its comprehensive analysis, aiding international employers in designing equitable compensation packages. This year’s survey covered 226 cities worldwide, assessing the cost of over 200 items per location, including housing, transportation, food, clothing, household goods, and entertainment.
Global Context and Challenges
Rising housing costs globally are becoming a critical factor in attracting and retaining top talent. High housing expenses strain organisational budgets and impact employees' quality of life, leading to financial stress and reduced morale. The global economy continues to face challenges, including geopolitical conflicts, inflation, and rising housing costs, which complicate compensation strategies for multinational organisations.
Comparing the 2024 and 2023 Cost of Living surveys, Mumbai's significant rise of 11 places to 136th, after a drop of 20 places in 2023, underscores the dynamic economic factors influencing the city's cost-of-living. Other cities such as New Delhi, Kolkata, and Pune also showed upward movement, while Chennai and Bengaluru experienced declines. These shifts highlight the responsiveness of India's urban economies to both global and local economic forces.
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