Is India becoming too expensive for foreigners?

For decades, India has enjoyed a reputation as one of the world’s most affordable destinations. Whether for backpackers trekking through the Himalayas, digital nomads settling in coastal towns, or multinational executives based in metropolitan cities, the country has traditionally catered to every budget. Yet an increasingly common question among foreign visitors is whether India is gradually losing its affordability.

The answer depends largely on where one lives, how one chooses to live, and what one compares India with.

There is little doubt that the cost of living has risen sharply in India’s largest cities. Delhi, Mumbai, Bengaluru and Gurugram have witnessed steep increases in housing rents, premium dining, imported goods and luxury services. Foreign professionals working for multinational firms often prefer gated communities, international schools, imported groceries and private healthcare—all of which have become considerably more expensive.

Housing in prime locations of Mumbai and Gurugram now rivals costs in parts of Europe and Southeast Asia. International school fees have become another major expense, while imported products such as wine, cheese and gourmet foods continue to attract high import duties.

The tourism sector has also undergone a transformation. Popular destinations such as Goa, Rajasthan, Kerala and Himachal Pradesh witness sharp seasonal price increases, with hotels and resorts charging premium rates during holidays. Differential pricing at monuments, guided tours and transport services often reinforces the perception among foreigners that they are paying considerably more than locals.

Urban India’s rapidly expanding digital economy has further increased day-to-day spending. Frequent use of app-based food delivery and ride-hailing platforms can push monthly budgets well beyond initial expectations.

Yet these rising costs tell only one side of India’s story.

Compared with Europe, North America and Australia, India remains significantly more affordable for most essential expenses. Food, domestic travel, utilities and local transportation continue to cost only a fraction of what they do in many developed economies. According to recent international estimates, monthly living expenses for a single person in India, excluding rent, remain well below comparable costs in Western countries.

India’s food ecosystem remains one of its greatest advantages. Authentic regional cuisine—from South Indian meals in Chennai to street food in Delhi and Kolkata—offers excellent quality at modest prices. Even mid-range restaurants are substantially cheaper than those in cities such as London, Singapore or New York.

Transportation is another area where India retains a clear cost advantage. Its extensive railway network and competitive domestic aviation market make intercity travel affordable. Likewise, app-based taxis, though increasingly expensive by local standards, often remain inexpensive for visitors earning in stronger currencies.

Healthcare is perhaps India’s strongest value proposition. High-quality treatment in private hospitals across Chennai, Hyderabad and Delhi costs a fraction of comparable care in many developed countries, making India a leading destination for medical tourism.

Exchange rates further strengthen India’s appeal. Visitors earning in US dollars, euros or pounds enjoy significantly greater purchasing power, allowing them to stretch their budgets much further than they could in their home countries.

Perhaps the greatest reason for differing perceptions lies in India’s multiple economic realities. A foreign executive pursuing a luxury lifestyle in Mumbai will face vastly different expenses from a backpacker exploring Himachal Pradesh or a yoga enthusiast living in Rishikesh. Likewise, Tier-II cities such as Bhubaneswar, Kochi and Patna remain substantially more affordable than India’s technology and financial hubs.

India’s diversity extends beyond culture and geography—it also encompasses an extraordinary range of price points. Luxury apartments, five-star hotels and imported lifestyles can rival costs anywhere in the world. At the same time, those willing to embrace local transport, neighbourhood markets and regional cuisine continue to find India among the world’s most affordable destinations.

Ultimately, whether India is “too expensive” depends less on the country itself than on the lifestyle one chooses. Rising urban inflation, premium housing and commercialised tourism have undoubtedly made certain segments more costly. Nevertheless, for most foreigners, India continues to offer an unmatched combination of affordability, diversity and value—qualities that few major economies can replicate.

(Padhan Professor of Economics, XLRI, Jamshedpur &  Mukherjee is Assistant Professor in Economics St. Xavier’s University, Kolkata)

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.