Mumbai More Expensive For Expats Than Melbourne, Frankfurt

The cost of living for expatriates in Mumbai is the highest in India, and more expensive than its global peers like Melbourne and Frankfurt, a 2018 cost of living survey by global consulting firm Mercer reported.

The financial capital of the country is ranked at the 55th spot in terms of cost of living globally, higher than cities like Melbourne (58), Frankfurt (68), Buenos Aires (76), Stockholm (89) and Atlanta (95), according to the survey.

Other Indian cities featuring in the survey include Delhi (103), Chennai (144) and Bengaluru (170). At the 182nd position, Kolkata is the least expensive Indian city.

"While cities such as Melbourne and Buenos Aires have fallen in their rankings, Mumbai's jump is attributable to the continued surge in prices of food, alcohol and domestic supplies," the survey noted.

Hong Kong is ranked as the world's costliest city to live for expatriates.

Costs of sporting, leisure related activities have also played a role in contributing to rising prices, followed in part by transportation costs, which includes taxi fares and cost of registration and road taxes, the survey noted.

Inflation, among the highest in Indian cities surveyed, remained at 5.57 percent for the surveyed set of expatriate goods, during the survey period. This is especially true for prices of expatriate food items such as, butter, meat and poultry as well as premium farm produce which have increased significantly, along with prices of alcohol, according to the report.

The survey is designed to help multinational companies and governments determine compensation strategies for their expatriate employees.

According to Mercer's International Policies and Practices Report on India, 93 percent of companies do compensate through a cost of living allowance for their expatriate assignee.

"This increase in prices of goods in our cities, viewed along with currency exchange rate, has a direct impact on the Indian assignee compensation when using a balance sheet approach, making overseas assignment costs sometimes greater and sometimes smaller," said Padma Ramanathan, India practice leader, global mobility, Mercer.

In this scenario, companies are reconsidering how frequently expatriate salaries are reviewed, she said, adding in balancing assignee cost with assignee satisfaction, some companies prefer to let the assignee retain the benefit of windfall if applicable.

This year's rankings in the survey, which uses New York City as the base city for all comparisons, includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location.