The inequality between the rich and the poor keeps wages and prices low.
Check out world's most expensive and cheapest cities.
Economist Intelligence Unit survey compares more than 400 individual prices across 160 products and services.
Global HR services firm Mercer's survey of 214 cities worldwide has ranked Tokyo as the most expensive, while Karachi is the least costly place for expatriates.
As per the worldwide 'cost of living' survey by Economist Intelligence Unit, Mumbai is the second least expensive city globally, while New Delhi is ranked fourth.
Singapore retained its title as the world's most expensive city for the fourth consecutive year, while Hong Kong remained second, closely followed by Zurich at the 3rd place.
Seven Indian cities - Mumbai, New Delhi, Chennai, Hyderabad, Kolkata, Pune and Bangalore have all moved up by 14-21 ranks in the survey titled 'Worldwide Cost of Living Ranking 2007' prepared by Hong Kong-based solution provider for international HR professionals ECA International.
Mumbai and New Delhi are among the world's cheapest cities while Tokyo and Osaka-Kobe in Japan continue to remain the most expensive, the annual Economist Intelligence Unit's Worldwide Cost of Living Survey said.
Singapore retains the title of the world's most expensive city.
Karachi is the world's cheapest cities to live in.