According to Mercer’s 2020 Cost of Living Survey results, Mumbai remains at the top of the most expensive city in India. Mumbai has climbed seven spots globally, ranking as the 19th most expensive city in Asia for expatriates living and working overseas. Six of the top 10 cities in this year’s ranking are in Asia. Hong Kong has retained its place as the most expensive city in Asia and worldwide, now for three consecutive years.
Coming back to the Indian cities, Mumbai retained the top spot at the 60th position, followed by New Delhi (101) and Chennai (143). In the same list, Bengaluru (171) and Kolkata (185) ranked as the least expensive Indian cities.
Among the Asian cities, Mumbai is at 19th position, which is one position up from the previous year. Globally, Mumbai still ranks (with New York as a common base) higher and more expensive, surpassing cities like Amsterdam (64), Sydney (66), Frankfurt (76), Berlin (80), Toronto (98). This is significantly led by the housing rental costs being among the most expensive worldwide. In a pandemic era, where cleaning supplies (e.g. Antiseptic spray, disinfectant, household liquid cleaning product and Soap etc.) and comfort food have become more popular in use, price of goods in these categories is however are considerably less expensive in the city, compared to other such global commercial cities.
Overall, each Indian city surveyed showed a jump in rankings by a minimum of four places, with New Delhi (101) having climbed the most by seventeen positions and missed being in the top 100 list of most expensive cities for expatriates by a whisker. In most part, the relative positioning of other cities such as those in Europe being pushed down the order for currency reasons have influenced the jump in rankings across. However, there has been an inflationary increase in prices of goods & services in personal care and utility categories across cities, especially for Mumbai and New Delhi.
Chennai is at 143 position after climbing eleven spots in the list compared to other Indian cities, influenced by its position in the middle of the survey & inflation, but remaining an attractive expatriate destination for its relative affordability in expatriate housing and eating out. Bengaluru is at 171 rank and has risen eight spots in position, displaying slight strain on costs in food & utilities. Kolkata is now at 185 remains the least expensive especially for rental and domestic costs among the surveyed in India.
“With challenges of cost considerations and complexity of operating globally in today’s environment, reinventing talent mobility programs is imperative in the future agenda, post-crisis. This could comprise applying newer economic models, using distributed talent workforces, newer ways of working enabled by technology. Leveraging access to right information for location assessments is also a critical factor for right talent decisions. For example, it is not surprising that Indian cities are emerging to be among key contenders providing a business case to relocate operations for manufacturing or services for reasons such as skill availability, cost competitiveness and attractiveness to mobilize executives to conduct business ”, added Ms. Padma.
In the wake of COVID-19, social and economic disruption has spurred organizations to reassess their global mobility programs with a focus on the well-being of their expatriate employees, balanced with economics. It is also implying a future closer monitoring of specific factors such as currency fluctuations, cost inflation for goods and services, and instability of accommodation prices that are essential to determining the cost of expatriate packages for employees on international assignments.
“The COVID-19 pandemic reminds us that sending and keeping employees on international assignments is a huge responsibility and a difficult task to manage. Rather than bet on a dramatic resurgence of mobility, organizations should prepare for the redeployment of their mobile workforces, leading with empathy and understanding that not all expatriates will be ready or willing to go abroad.” , said Ilya Bonic, Career President and Head of Mercer Strategy.
The Indian Rupee, for example, weakened significantly against the US dollar during the peak of the outbreak amid concerns of the economic downturn. The US dollar strengthened against most currencies, pushing cities in USA up in ranking, whereas despite some small price increases in Europe, several local currencies have weakened against the US dollar, pushing cities in this region down in the ranking.
“In the first phase of the COVID-19 pandemic, most companies braced for the immediate impact, putting people first to ensure safety and well-being of employees overseas through repatriation, regulatory adherence or ensuring fund exchanges remained possible. As we recover in the short-term, companies are preparing for redeployment & business continuity. The levels of atypical volatility in currency & shortage of goods impacted by supply chain disruption may suggest inflationary impact in future, requiring balancing between cost considerations and making adjustments for purchasing power.” , said Padma Ramanathan, Global Talent Mobility Practice Leader at Mercer.
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