India cheapest country to live in after South Africa: Survey

India is ranked second only to South Africa as the cheapest country to live or retire, according to a recent survey of 112 countries.

The survey by GoBankingRates ranked nations on the bases of four key affordability metrics provided by online pricing database Numbeo. The metrics are: Local purchasing power index, rent index, Groceries index, and Consumer price index.

With the second lowest rent index among the 50 cheapest countries (after neighbour Nepal), living in India can be cheaper compared to most of the countries.

India also has some of the lowest prices for consumer goods and groceries, with typical monthly expenses for these priced around USD 285 for a single person living in Kolkata.

The survey says that India, home to 1.25 billion residents, is the most populous among the 50 cheapest countries. Its major industries include textiles, chemicals and food processing. India also has a relatively high local purchasing power in the major cities that were surveyed.

India's local purchasing power is 20.9% lower, rent is 95.2% cheaper, groceries are 74.4% cheaper, local goods and services are 74.9% cheaper, the survey said.

India is cheaper than its neighbouring countries like Colombia ranked at 13, Pakistan (14), Nepal (28), Bangladesh (40).

The local purchasing power index measures the relative purchasing power of a typical salary in that country, compared to New York City. A lower purchasing power buys fewer goods, while a higher purchasing power buys more.

While the rent index compares typical rental prices in the country to New York City, the groceries index holds a similar comparison for typical grocery prices.

The consumer price index compares costs of local goods and services - including restaurants, groceries, transportation and utilities to New York City.

According to the survey, even among the 50 cheapest countries, rent is at least 70%  cheaper than in New York City, groceries are at least 40% cheaper, and consumer goods and services cost less by 30% or more.

Local purchasing power does vary greatly among these cheap countries, however.

South Africa has topped the survey as the cheapest country to live or retire. Being the world's largest producer of platinum, gold and chromium, goes far to enrich the country and its economy. This resulted in a local purchasing power that is significantly higher than what New Yorkers face, which is the most favourable factor that helps South Africa top the list.

Along with a higher local purchasing power, South Africa also offers lower prices on consumer goods and groceries, and rent costs that are typical of the 50 cheapest countries. In the major city of Cape Town, for instance, monthly expenses total just under USD 400 while the average rent costs are reflected by the typical price to rent a one-bedroom in Durban of around USD 280 a month.

Among the most expensive countries in the survey are Bermuda (ranked 112), Bahamas (111), Hong Kong (110), Switzerland (109) and Ghana (108).