Moving to India: Cost of Living

'How much will it cost me to live well in Mumbai or Delhi?' This was the question I posed to many of my friends in India prior to my move. Since the definition of 'living well' varies from person to person, the range of numbers I received was fairly wide. My dear old mother who lives in Jamshedpur was not of much help either as she's still living in the seventies as far as the price index is concerned. Just ask the local vegetable grocer who has to haggle with her to recover his cost price. If you are a native of India returning home after a while, you are going to face some sticker shock till you convert back into your home currency for reference. Here's a quick primer to help you with your budgeting:

1. Cost of Real Estate: This is likely to be the biggest cost factor in your cost of living in India. I will cite price points for the two cities I am familiar with-Mumbai and Delhi/Gurgaon.

Mumbai is one of the most over-priced cities in the world in terms of value for money. South Mumbai real estate costs about $500-$700 per sq ft in a high rise condo building and about $250-$300 per sq ft in crappy buildings that would qualify as a ghettos anywhere else. When you think ghetto quality, keep in mind that even the good quality condo buildings in South Mumbai are so bad that you would find dirty staircases, crumbling exteriors, leaky windows (rainwater floods in) and poor plumbing when you pay $500 per sq ft. Prices in upcoming areas like Parel and Bandra are about $250-$300 for new construction which is superior to anything you will find in South Mumbai. However, living in a Parel condo building is like living in an oasis in the middle of a giant smelly slum. Also, the streets in Bandra and Parel get flooded with knee deep water paralysing traffic in the area during the monsoons. It becomes a nightmare to enter or leave home. Bandra prices are somewhere between Parel and South Mumbai and the location is popular with yuppies due to its nightlife and shopping choices. However, it takes more than an hour to enter and exit Bandra due to horrendous traffic conditions on the main artery linking Bandra to the rest of Mumbai. The rental yield in Mumbai is about 5-6% and landlords here try to push up rents in tandem with rising prices. Mumbai landlords insist on a 12 month advance rent and a large security deposit unless the renter has a large well known corporation's name on the lease. As a rule of thumb, expect to pay Rs 100,000 per month for a 2 BR apartment (about 1000 sq ft) and Rs 150,000 per month for a 3 BR apartment. If you choose to buy instead on renting, expect your monthly loan repayment to be about 2 X your rent in Mumbai and about 3 X the rent in Delhi/Gurgaon. The cost of home loans in India is fairly high at the current rate of 10.5%. The rule of the thumb to calculate your monthly loan installment would be Rs 1000 ($22) for every Rs 100k ($2200) you borrow, on a 20 year loan. If you choose to finance a $500k house with a 10% deposit, expect to pay about Rs 200k ($4350) per month.

2. Cost of Domestic Staff: Domestic help is cheap. A full time maid in Mumbai who cooks and cleans costs about Rs 2500 ($55) a month and a good driver costs around Rs 5k-7k ($110-$155) a month. For Delhi, you can assume approximately 60% of Mumbai salaries, however, I may be slightly off the mark here.

3. Groceries: Cost about Rs 10k-Rs 12k ($200) a month for a couple.

4. Dining Out: The best restaurants in Mumbai and Delhi cost as much as mid-tier restaurants in NYC or a major metro in the developed world. Expect to pay about Rs 3,000 to Rs 4,000 ($65-$80) for dinner and drinks for a couple. Cocktails at the top clubs and bars cost about Rs 350-Rs 500 ($8-$10) whereas beer is cheaper at Rs 175-Rs 200 ($4) a pint.

5. Clothes: There are a host of local apparel brands that sell urbanwear to India's teeming population of young consumers at Walmart prices. The quality is average but the designs are superior to anthing you will find at Walmart. Most of the major foreign brands are here including Levi's, Lee, Nike and Adidas. For some reason, I haven't seen Gap or Banana Republic here. Diesel is enormously popular with the rich young set here but they seem to have been acquired on overseas trips as I haven't seen a local Diesel store here. You can also buy designer clothing by local fashion designers who are pretty good but they are not cheap. Expect to pay at least Hugo Boss prices for their offerings.

6. Electronics & Appliances: This is one sector which has experienced significant price deflation over the years as import barriers and duties have come down. While you can't expect Wal-Mart price style prices here, expect to pay about 30% more for foreign brands (mostly due to import duties) that what you would pay at Bestbuy. Do your homework to find out if the foreign brand being sold is assembled in India-the import duties are a lot less on imported product kits assembled here vs. those that are imported in finished condition.

7. Gas Prices: Petrol cost Rs 50 a liter ($4.92 a gallon). Think of disel cars as a serious option as the government subsidizes it heavily here.

8. Car Prices: There are many foreign brands in India now offering a decent line up of mid-range cars. I am not a car buff so I won't venture to offer much opinion here. For price reference, consider a Toyota Corolla, a popular car with senior executives here. It costs about Rs 1 mill ($22k). A Toyota Camry costs twice as much as the import duty on it is almost 3 times as much-it's assembled outside India whereas the Corolla is assembled here. Car loans with principal repayment are available at 9%-10.5% rates for upto six year tenures. I am not sure if lease finance is available for cars in India.

PS: For the pie chart above, I have assumed the monthly instalment cost on a Toyota Corolla on a three year loan.

9. Getting past the gringo premium: While you have been busy blowing your hard earned savings on vacations in Hawaii to get your annual quota of sex from your spouse, your frugal relatives here have been a lot smarter with their money. They buy gold periodically to appease their spouses. Indian households save on average 25%+ of their annual income. Those who invested in real estate and stocks here doubled and tripled their investments in the last three years. With income levels shooting up at 20-30% a year across most white collar jobs, it's a matter of time when the Indian professional catches up with the median salary in the west. Yet, locals still treat visitors from the west as super-wealthy VIPs who should pay twice as much for everything. All you have to do is go online at an airline site and see the difference between the 'Indian resident' and 'Non-resident' prices for the same flight! It's best you shop with a savvy local till you get a sense of the domestic price index. A dollar still goes a long way even in Mumbai-more on this in an upcoming post.

10. Cost of Vacations: There is a huge shortage of quality hotel rooms in India and prices have gone sky high. A rapid increase in tourism and disposable income with local Indians has caused average room rates to shoot up dramatically. Room rates at five star hotels in popular locations like Goa, Rajasthan and Kerela, Mumbai, Kolkata and Delhi cost as much as to Rs 12,500 ($275) to Rs 16,000 ($350) a night during the peak season (Oct 1 - Feb 28). Book early (at least six months in advance) to lock in rooms and lower rates for your winter vacation.

11. Communications: The mobile revolution has made phone calls cheap. Domestic calls cost Rs 1 (2.2c) per minute on average, international calls to the US and EU are about Rs 5 - Rs 7.50 (11c - 16 c). Monthly subscription for a post-paid mobile connection is about Rs 400 ($9.50) a month. Hi speed internet access from MTNL, the best provider in India costs about Rs 3k a month with 512 kbps bandwidth and 4 GB download. You can also get a wireless internet data card for your laptop to receive and send emails on the road. It costs Rs 1,500 ($33) a month for unlimited data download. However, its very slow with actual bandwidth of 40-50kbps.

12. Base Case Monthly Budget: I would say about Rs 200k ($4400) for a couple living in a 2 BR in Mumbai and about Rs 120k ($2,600) for Delhi/Gurgaon. This would afford you a comfortable home, car, maid and a driver with the option to dine out at the best local restarants 6-8 times a month. However, this does not include discretionary extras like vacations, fancy parties, designer jewelry or clothing or for that matter, the cost of stocking up your bar. To some, a Rs 200k per month budget for Mumbai may appear over-the-top given that the average white collar Mumbaikar probably makes 2-3 times that much in an entire year. I should clarify that my reccomendations are targeted at folks who expect to make $100k + salary packages here in India, which are becoming increasingly common at senior levels in the financial and corporate sector in India.

Disclaimer: I am single and don't have any idea what it costs to raise kids in India today. This budget is based on estimates drawn from my personal experience.

Hope this post is useful. Please feel free to comment on it if you have any queries.

Comments

[Amit Singh]

Hi Vikram

I throughly enjoyed the last 45 mins reading your blogs. 'I truly learned something' - thats how I feel.

The detail in the information was very helpful. And your light narrative writing style makes this an easy read.

I too am moving to Mumbai in Feb.

To put your opinions in context, I think your readers would love to learn more about your background. I hope you feel comfortable sharing details, like what you did in NYC, why did you want to try India, how did you shape your career towards India.

I'm single - are Mumbai women approachable? I'm talking about the safe, clean stuff; like dinner, movie, strolls.

[aman]

first of any such information i've found thus far. tremendously helpful...

would be helpful to know variance in income levels / job supply between nyc and mumbai / delhi for finance related jobs. i know that's a tough one and some what open ended yet curious on your perspective.

thanks again and will certainly be back for more...

ciao!

[Vikram Chachra]

I can't comment on the job market in NYC. There is huge demand for top tier finance professionals in Mumbai as new entrants are coming in droves. Starting salaries for fresh MBAs (from IIMs, XLRI, etc) are in the range of Rs 10 lacs in foreign banks and sell side brokerages. If you are a sell side associate with 2-3 years experience in the US, you will most likely end up with Rs 12-18 lacs at local sell side firms like Merrill. MBAs with 10 years experience can probably get base salaries of Rs 50 lacs plus bonus. FII Buy side firms in India pay more than sell side firms. You can expect 40-50% more at PE and hedge funds. The bonus upside in India is somewhat limited and a total package of a crore is considered decent for most portfolio managers. Opportunities industry in Delhi are somewhat limited although a few large PE funds operate there.

[Suja]

It is great to see this anlaysis. Will add you to the blog-list of the Return-to-India section of GaramChai.com

[Shree]

Very interesting! very informative indeed.
Just curious if you have any idea of kids schooling expenses?
I am sure this will be quite a lot depending on the type of school

[Paddy]

Hi,

Living expenses in Bangalore is something I would like to share for the benefit of those planning a return. This will be the cost for a small to medium NRI trying to live a middle class life style. This is cost per month for a family of 2 Adults and upto 2 children

Rentals 3 Bedroom apartment Rs.30000
This would include your maintenance, cable TV,maid working 2 hours per day, laundry and electricity , gas and water.

Phone, mobile, internet... Rs.3000

Local transport... Rs.5000

Food expenses .... Rs.15000

Phone and Internet Estimate Rs.5000
(most of the cases it will happen)

School fees and tuitions 4 lakhs per annum... 35000

To sum up you need one lakh a month approx.

If you happen to own your house may be you can manage with 80000 per month.

Too high,,, well if you are planning a meaningful and purposeful life, relocate to smaller towns andyou can live at 50% of the cost...well schooling is the compromise. and be doubly happy.

The choice is yours...

[Jayashree]

this was an excellent piece of info. any ideas about the salary levels for CA/CPA with 9 years experience. just curious. i am also having relocating plans.this year prob. the bet is bombay/blore or gurgaon! thanks guys! very useful!

[Dhawal]

Hi...thanks for info....we are too returning to india by end of this year. u have done gr8 job. highly appreciate it.

abt the cost of living in condo...i defer from you simply because you have mentioned one requires $200k (Rs 200,000) thats 2 lakhs rupees a month..for rent. I guess its typo here with one more zero..difference of indian n US style of writing numbers.

condos in Mumbai range from RS 30 lacs to upwards of 80 lacs for two Bedroom median range is around between 60-70 lacs for decent condos. which would make the mortgage be around 15k-30k depending on how one takes it.

ONE MAIN THING not inluded is schooling. schooling in Mumbai is not FREE. goes from 10k-40k per year (ie $200 to $1000 per yr)

thanks once again
Dhawal

[Vikram Chachra]

Hi Dhawal,

The piece you refer to is a bit dated. Rents in Mumbai have gone up by approx 20%-50% as since last fall as there is a huge shortage of good quality apartments. Please keep this in mind while budgeting a move to Mumbai.

Vikram

[Sunil]

Hi,
This blog is really informative. I was looking to move to Gujarat (Rajkot) where my folks are from. My parents already own a house there, can anyone give some indications on the cost of living there. I was looking to rent out the property in London (Monthly rent £1500) and 'retire' early in India and get away from the fast paced life of doing long hrs working and being away from family on business. I also need to know the cost of education there as i have young children.

[Lokesh Sood]

Hey,

All you guys looking to move to Gurgaon /New Delhi call me at 9810003555.Will help you find a good apartment and relocate with least hassles. You must budget for USD 300k (with the falling $$) for buying and Approx 2k upwards for rentals for a decent accomodation with a good neighbourhood in Gurgaon, Delhi is another story.

[sachin]

One of the best blogs i have ever read on this topic. Very insightful. Great job.

Overall one thing is for sure that it does take an arm and a leg to live well in a megapolis like mumbai. When i say live well, I mean live in a crummy suburb like bandra where the infrastructure is crumbling and traffic is bad. Oh not to mention the horrible mumbai weather.

I live in the US and currently have zero intentions to return at this point but as and when I have thought about it I doubt mumbai, delhi or bangalore would be the places I would go after. I hail from a much smaller city (like bhopal, chandigarh, surat, baroda, guwhati, jaipur) where you can live like a darn king for a much smaller amount.

Of course you will not be able to access all the high profile employment opportunities but heck if I have to leave wall street or silicon valley, i might as well leave it for an entirely different experience rather than to re-enter the rat race in India. If rat race it is then best to run it alongside big boys here in the US.

In a second tier city a mega mansion will cost you about $150k and you can live like a king on $1k. So if you have $1M saved up, you would not have to work for an extra day if you dont want to. If so why run the rat race in India.

[Vivek]

Hi Vikram,

Could you please give some information on the Income Tax?

Specifically, i am interested in knowing, what I have to do, to make sure that the money I earned in US, does not get taxed in India, when I move back.

Thanks.

[James]

I have been quoted a much lower rent - it is not the city centre/south of the city but I wondered if it might be a bad location. Do you know Goregaon (East) on the north side of Mumbai?

[Devdas]

James, Goregaon(E) is a fairly decent location. You are about an hour (or two) of travelling away from the south end of the city, but otherwise the place is decent. I live slightly further to the north.

[Suhas]

I am planning to move back to Mumbai/Pune in the next 2 or 3 years after 40 yrs in N. America. I would like to know what it would cost to furnish a 2 bedrm apartment with decent furniture, TV, stereo, computer and other essentials. Do you get decent delivery and after-purchase service on these items? Are there reputable dealers? Is setting up an apartment hassle free? Also, how convenient and costly is routine car maintenance in India?

Hope someone can help with comments.

This is a great blog and will need to keep going, given the constantly changing prices and conditions.

[Vikram]

You should budget approx Rs 10 lacs to furnish your apartment well. If you are planning to move into a new apartment, then you should budget another Rs 10 lacs for woodwork as most builders don't provide shelves, storage space, etc. There are two decent electronics stores in Mumbai with branches across the city: Vijay Sales and Sony Mony. Both have decent delivery. The after sales service depends on the brand. LG has the best after sales service amongst the white goods brands.

Don't expect to set up your house in a couple of weeks. If you are planning to buy a house and renovate, budget at least 3-4 months with a lot of running around and close supervision on the process. Avoid moving here during monsoons, you won't be able to get much done. Ask your local friends for advice. Only 1% of India's retail is organized, the rest is based on personal relationships. Be prepared to bargain for everything, including electronics, white goods. No matter what the store manager tells you, he can give you 10-20% discounts on most items you buy.

Hope this helps.

[Jay]

I've been offered a job in Mumbai as a computer programmer. I have to make a decision by next weekend to accept the job or turn it down. Mumbai seems like a very energetic and spontaneous city to live in. Is it comparable to the size of New York City? I don't necessarily like living inside a big city because I'm more of a country man. I enjoy to live away from the city to feel peaceful. Is there any nice rural areas within a 0.5-1.0 hour ride of the city? It seems like it would be much cheaper to live outside of Mumbai rather than in it, but I could use some recommendations on smaller cities/towns outside of Mumbai to live in.

Secondly, can anyone lookup how much a intermediate/mid-level programmer makes on average in Mumbai? I want to make what I'm being offered is on par with the rest of the IT community.

This opportunity sounds really exciting being 30 and single. They are offering to pay for a driver, maid, and cook. I was told by a friend from India that you could have a really nice place to live for Rs 20k/month, but it seems small apartments inside the city cost that much alone. Though I'm not sure what part of India he lives in.

Also from what I've heard is that it is forbidden to eat cow meat in India and that diets consist mostly of chicken, pork, turkey, and fish as meats. Is this 100% true or can you order a steak or hamburger at some resteraunts in Mumbai? It's not like I'm going to miss McDonalds or Burger King, but occasionally I would get that craving from growing in the U.S.

Thanks in advance for any advice or help you can give me in making this HUGE decision!

[Karm]

The information was great but a little dated. After 20+ years in the US as a construction professional, I am contemplating a return due to the accelerating opportunities available in India at present. The one major expenditure missing is schooling for kids.Any infomation on that will be appriciated. Also Do these figures still hold up or should there be a multiplier attached to this?

thanks a lot

[Sushmit]

Hi,
The article was really interesting, but it also vindicated my decision to move back to a smaller place(in more ways than one!)like Dehradun. We moved back 10 months ago from the US. Life is very peaceful where I live;it is in Vasant Vihar, a "posh area" of Dehradun, with not much vehicular traffic, nor very crowded. It is very clean, has beautiful big houses, and good roads. You can get just about anything delivered to your house. I'm paying Rs 9,000 as rent for a 3-bedroom house which was recently remodelled and repainted.My (almost) 5 -yr old goes to a very good school(there are lots of these here!)and we found an excellent daycare for my 1 1/2 yr old dtr. You can have bank managers and insurance agents come up to your house when you need them. Not everything is a bed of roses, but we are very happy here, even though salaries are nowhere near what you would expect to get in a metro. For about Rs 35,000 a month, we have what we consider a pretty good life.

[Dennis Osborn]

I really enjoyed your site.. I have been to many sites and yours was the most informative. My wife and I are retired on a small pension. After Federal Taxes and Health Premium deductions, I have about $2,200 per month, until I recieve Social Security from the U.S. government.

Can I use Cigna Health Insurance in India?

I will not be seeking employment, so I can live anywhere, can I live comfortably on this pension?

I have about $50,000 dollars cash that I can invest in my living expenses. As for buying a house, I am not sure....since I am not wanting to immigrate to India, just live there for a while to learn its customs and language.

[anil]

hi
The piece you refer to is a bit dated. Rents in Mumbai have gone up by approx 20%-50% as since last fall as there is a huge shortage of good quality apartments. Please keep this in mind while budgeting a move to Mumbai.

[baiju]

Hi,

I was wondering if anyone knows how to find a job in Mumbai. I was born and raised in America, but would love to move to India for work. I have a bachelors degree in Finance and Real Estate Investment. If anyone has any information that can help me, please email me at baiju23@gmail.com

[hilton naidoo]

hi people
can any1 help me?im south african indian born male...gonna be in india as of the 2nd week in april 2008.need some assistance in finding accommodation etc..pls pls mail me if possible...hiltonnaidoo@polka.co.za

[Garage Door Hardware]

Since I will be home this week, I plan to catch up on my paperwork, housework - and alll of those little projects that we always keep putting off - if you know what I mean... LOL!!!!!! Heck, I even looked up that today! Now tell me - how funny is that?????