According to the Economist Intelligence Unit's (EIU) 2014 'Worldwide Cost of Living' survey released here, Singapore is on the other end of the spectrum as the world's most expensive city.
"Improving sentiment in structurally expensive European cities combined with the continued rise of Asian hubs means that these two regions continue to supply most of the world's most expensive cities.
But Asian cities also continue to make up many of the world's cheapest, especially in the Indian subcontinent," said Jon Copestake, editor of the EIU report.
The reason for the Indian cities scoring high on the lower end is attributed to inequality between the richest and poorest in India's major cities which keeps wages and prices low, while spending is also stifled by government subsidies.
Karachi in Pakistan is ranked as the second least costly city with Damascus (Syria) and Kathmandu (Nepal) completing the five least expensive places to live in around the world.
The 'Worldwide Cost of Living' is a twice-yearly EIU survey that compares more than 400 individual prices across 160 products and services.
These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.
It is designed as a relocation tool that uses New York as a base. Singapore this year replaces Tokyo, which topped the list in 2013.
Other cities making up the top five most expensive cities are Paris, Oslo, Zurich and Sydney, with Tokyo falling to sixth place.
London, meanwhile, was ranked 15th and the only other UK city to be included in the results was Manchester, way down in 49th.