For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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As businesses continue expanding their presence in diverse markets, India stands out as a thriving and dynamic destination for global talent, and a hot topic among Perckpeek’s global mobility clients looking to explore new talent opportunities.
With over 18 million foreign nationals calling India home, the country boasts the largest expat population in the world. As India’s economy strengthens, the prospect of corporate relocation becomes more attractive for skilled overseas talent. As technology and other industries boom, domestic relocation is also on the rise, as Indian nationals flock to business and tech hubs for new career opportunities.
For HR and global mobility leaders, orchestrating a seamless transition to (or within) India involves a unique set of challenges and opportunities. With its rich history, diverse culture, and booming economy, India offers an exciting landscape for expatriates and domestic relocators. However, it also presents complexities that require careful navigation. Therefore, providing the right corporate relocation services is crucial for successfully supporting relocating employees.
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Need help crafting a relocation policy for employees moving to or within India?
Need help crafting a relocation policy for employees moving to or within India? This guide offers key insights for planning India relocations, but if you’d like expert guidance on creating a comprehensive strategy for relocators or relocation assistance in crafting a relocation policy or a review of your current policy, reach out to Perckpeek’s Global Mobility Team!
India’s major cities each offer unique advantages and challenges for employees looking to relocate. Crafting a corporate relocation package that considers the specific needs of each city can make a significant difference in how employees adapt to their new environment.
India generally offers a favorable balance when it comes to the cost of living, especially compared to many other countries. Basic expenses such as food, transportation, and accommodation are typically more affordable. However, costs can vary significantly between locations, with major urban areas like Mumbai and Delhi being relatively more expensive.
Average costs in India in 2023 (Source: Numbeo)
Facts and figures
According to Numbeo, consumer prices (without rent) in India are 172% lower than the UK, 185% lower than Germany and 231% lower than the USA
India is far from immune from the cost of living crisis seen across the world in 2023;retail inflation remains high at 6.83% in August after a 15-month high of 7.44% in July
The country s low cost of living often enables families (and not just expats) to afford household staff, such as cooks, cleaners, and nannies, improving their quality of life
It’s a great idea for HR and GM professionals to provide insights and cost-of-living comparisons—available through relocation services or online research—allowing employees to make informed choices as they transition to India. This way, they can effectively manage their finances and maintain a comfortable standard of living in this diverse and economically varied country.
In the next few sections we’ll navigate the complexities of moving to India, from Pre Departure to Settling In, allowing you to harness the potential of this burgeoning economy while ensuring a smooth transition for your international and domestic workforce. India awaits, and with the right knowledge and strategies, your employees will thrive in this vibrant and diverse environment!
Relocating employees to India comes with a set of immigration requirements that can seem a bit of a puzzle. To make sure that you navigate these challenges correctly, it’s a good idea to hand the process to experienced providers of corporate relocation services who are up-to-date on current laws and the latest updates.
Here’s a rundown of the key requirements:
Employees bound for India will need to dig into the tax nitty-gritty as part of their transition. India's tax system can be a bit of a rollercoaster, so here are some specifics to keep in mind when managing a corporate relocation:
Tax advisors can help guide employees through this financial maze. They can ensure they’re making the most of deductions and exemptions, help with tax return filing, and provide valuable advice on keeping financial affairs in order when they relocate to India. If you’d like to be put in touch with a tax advisor to assist with your employee relocations, just reach out to PerchPeek for expert relocation services here!
Flights within and to India offer a robust network connecting major cities and international destinations, which is an essential aspect of any corporate relocation. However, flight costs have increased in recent years due to soaring oil prices, a trend seen globally. According to a Q3 2023 report, India has recorded the highest surge in airfares in the Asia-Pacific region, with prices up by 41% year-over-year. As a result, HR and Global Mobility (GM) leaders should plan relocation carefully around peak times and use their relocation lump sum budgets effectively.
Domestic Routes
International Routes
When it comes to onward travel, there are plenty of options for employees to reach their final destination. Read on for PerchPeek’s advice on getting around by road and public transport to ensure a seamless relocation experience!
Childcare and education in India offer a wide range of options, making it crucial for those relocating to understand the educational landscape as part of their corporate relocation package. The quality and cost can vary significantly, which can influence the overall relocation policy provided by employers.
Preschool and daycare facilities, often referred to as "playschools," cater to children as young as 18 months. Costs for these programs can range from a few hundred to a few thousand US dollars per year, depending on the facilities and location, which should be considered when offering relocation assistance.
Primary and secondary education in India is typically offered by government schools, private schools, and international schools. Government schools are the most affordable option, often costing less than $100 per year, but they may have limited resources. It’s worth noting that English is widely taught in public schools across the country, making them a viable option in some cases.
Most expats in India choose to send their children to private schools, where fees vary widely, from around $500 to $3,000 or more annually, depending on the quality and reputation of the institution. International schools, which offer global curricula like IB, IGCSE, or Cambridge, tend to be the most expensive, with annual fees ranging from $5,000 to $20,000 or more. These costs should be factored into the lump sum relocation package offered to employees.
Local education consultants can be invaluable at this stage to outline the available options, help make the best choice for each family’s individual needs, and complete applications. For those seeking relocation services, PerchPeek can assist in connecting with education consultants—just reach out to us!
Banking in India offers a mix of traditional and modern options, which is crucial to consider as part of any corporate relocation plan. Leading public sector banks like the State Bank of India and private banks such as ICICI and HDFC provide extensive branch networks across the country, making them reliable choices for those looking to relocate. These banks offer a wide range of services, from savings accounts to loans and investment products, as well as NRI (Non-Resident Indian) accounts, which could be an essential part of your relocation package.
There are also plenty of international banks established in India, including:
Expats with short-term assignments or temporary residency in India may find it more convenient to maintain their existing international bank accounts. This approach allows them to manage finances easily in both India and their home country, and helps circumvent some of the bureaucratic hurdles often associated with banking in India. Including this in your relocation assistance can help reduce stress for employees.
Online banking has also gained significant traction, enabling convenient transactions, bill payments, and fund transfers through secure internet banking portals and mobile apps. The Indian government’s push for digital payments has further boosted the growth of online banking services, making financial management more accessible for residents and expats alike. These modern banking services are a key element of a well-rounded relocation policy, providing a seamless experience for those who relocate.
Healthcare in India operates within a dual system: public and private, a critical consideration for any corporate relocation strategy. Despite being the fifth-largest economy globally, India spends only 1.28% of its GDP on healthcare. As a result, public healthcare facilities, while affordable, are often overburdened and may vary in quality. Most of the population relies on public healthcare due to its cost-effectiveness, but it can be crowded with longer wait times, which is a factor to consider when crafting a relocation package.
Private healthcare, on the other hand, is widely available and generally offers higher quality services. Many expats and those benefiting from corporate relocation services choose private health insurance to access these superior services. The cost for private health insurance typically ranges from INR 2,000 to 5,000 per month ($30 to $70), depending on the coverage provided. This option offers quicker access to better-equipped hospitals and a broader range of specialists, providing peace of mind for those who can afford it. Ensuring that relocation assistance includes options for private healthcare can be a vital aspect of a well-rounded relocation policy, especially in a market like India.
Getting around India by public transport offers diverse options:
Taxis, both local and app-based, are a popular and convenient way of getting around. Ride-sharing apps like Ola and Uber are especially popular due to their ease of use and transparent pricing. For international employees in the midst of a corporate relocation, this can make their daily commute easier.
In many urban metropolitan areas, cycling and walking are also viable for short distances, while long-distance train travel is an adventure worth experiencing for exploring different regions of this vast and diverse country - and far more pleasant than is often portrayed in the media.
Owing to the abolishment of the caste system and the country’s developing economy, there is an emerging middle class in India which has led to a housing boom. As such, there’s more high-quality accommodation available than ever before. Nonetheless, there’s consistent high competition for desirable properties, so home-hunters will need patience and resilience.
Market Figures and Trends at-a-Glance:
As many home-hunters use a broker to help find a long-term property (more on that shortly!), things can move quickly and employees may not need to stay in temporary accommodation for too long, compared to some Western countries. One month is generally a good rule of thumb.
Popular temporary accommodation platforms include RentMyStay, Sublet, and Airbnb. There are also many local services offering corporate relocation services such as serviced apartments and co-living spaces through providers including Formula, Relocatte, and Expat Orbit.
Due to high competition for rental properties, particularly in major metro areas, most home-hunters enlist a broker's services to help them find a home. This is a local consultant who drives the customers around and accompanies them to viewings. This costs around one month’s rent and usually speeds up the process significantly.
Property Searching
Searches - Top Tips
In India, electricity is the primary source of power, and frequent power cuts may occur in some areas. Air conditioning is common, especially in urban settings, leading to higher electricity costs, which typically range from INR 2,000 to 5,000 per month ($30 to $70), depending on usage. During cooler months, many households use gas or electric heaters for water and room heating.
Through relocation services such as those offered by PerchPeek, relocating employees can be connected with utility connection services to help set up everything quickly. Broadband internet is widely available, with speeds varying by location and provider. Reliable high-speed internet options are common in most urban areas, with monthly broadband costs ranging from INR 500 to 2,000 ($7 to $30), depending on the data limit and speed.
Food shopping in India offers a diverse culinary experience with options to suit every taste. Small vendors, local markets, and neighborhood stores are abundant, providing fresh produce and essentials at affordable prices.
Prices for vegetables, grains, and spices are notably lower compared to many Western countries, making it budget-friendly for most foreign nationals. However, food inflation has increased, with prices up +6.6% compared to 2022. Domestic relocators may feel these price increases more acutely than those coming from overseas.
Supermarkets such as Reliance Fresh, Big Bazaar, and D-Mart are also common, offering a more organized shopping experience, albeit at slightly higher prices. Online grocery shopping is becoming increasingly popular, adding convenience. The blend of traditional and modern shopping options ensures that newcomers have a wide array of choices for their food shopping needs.
Driving in India can be quite different from what newcomers might be used to. The traffic is often chaotic, characterized by a multitude of vehicles, frequent honking, and a general disregard for traffic rules. Lane discipline is rare, and roads are shared with pedestrians, livestock, and cyclists.
For many, adapting to these driving conditions can be overwhelming and hazardous. As a result, opting for a chauffeur-driven car is a popular choice. Hiring a full-time chauffeur costs around INR 15,000 to 25,000 per month (about $200 to $350 USD), offering a safer and more convenient option. This allows newcomers to focus on settling into their new environment while leaving the complexities of Indian traffic to the professionals.
India is incredibly linguistically diverse, with over 1,600 languages spoken, though 22 are officially recognized. It has the second-largest English-speaking population in the world (after the USA), with around 350 million people speaking it as a second language.
Multilingualism is prevalent, with many Indians proficient in at least two languages. While English is a useful tool, learning a bit of the local language can enhance the cultural experience and facilitate deeper integration into Indian society.
Not settling into the local culture is the leading cause of failed corporate relocations, making it crucial for relocating employees to understand the customs and traditions of their new environment to ensure a smooth transition and successful adaptation.
Firstly, it's important to recognize that India is known for its long working hours, which may come as a surprise to those from Western countries. Full-time employees typically work an average of 47.7 hours per week, compared to the global average of 43.9 hours.
Secondly, respect and relationship-building are essential in the Indian workplace. Demonstrating reverence towards superiors and colleagues is key to building trust and fostering effective collaboration.
Here are some tips for relocating employees to make a positive impression in the workplace:
Building new social connections in India can be both rewarding and relatively easy with the right corporate relocation services. Indians are known for their warmth and hospitality, and many are eager to welcome newcomers. Engaging in local cultural events, exploring community gatherings, and participating in activities like yoga classes, cultural workshops, and volunteer work can be excellent ways to meet people.
Relocating employees from abroad often form tight-knit communities, particularly in major cities, providing a support network for fellow newcomers. While it's common for expats to interact and share experiences, integrating with the local population is encouraged to enrich one's understanding of Indian culture and foster genuine friendships that bridge cultural gaps.
Here are a few suggestions for ways that newcomers to India can connect with other expats:
It’s super important to note that relocating to India often triggers a profound culture shock for Western expats due to stark differences in social norms, language barriers, chaotic urban environments, and a vibrant yet overwhelming cultural diversity. Adjusting to the pace of life, religious practices, and the caste system can pose significant challenges.
As an HR leader involved in corporate relocation, providing hands-on emotional support makes a huge difference. Initiatives such as setting up buddy systems and workplace expat communities, offering cultural training, and providing spousal support can alleviate the stress of acclimatization, especially with the right relocation assistance and relocation policy in place.
Relocating to India can be a transformative experience for both individuals and organizations. However, it's essential to approach this journey with careful planning, cultural sensitivity, and a thorough understanding of the unique challenges and opportunities that come with it.
Understanding the diverse fabric of Indian society, being mindful of cultural nuances, and having a handle on legal and compliance issues are all critical. Flexibility and a knack for out-of-the-box thinking are key attributes for those venturing into this dynamic market.
To ensure a successful corporate relocation, it's vital to build strong relationships with local experts and suppliers, harness technology for support, and provide employees with comprehensive relocation assistance. Offering a robust relocation package, including a lump sum relocation option if appropriate, can ease the transition. Keeping channels of communication open, fostering cross-cultural empathy, and prioritizing staff wellbeing can go a long way in ensuring a fruitful and fulfilling experience for everyone involved.
PerchPeek’s relocation coaches specialize in providing comprehensive support for employee relocations to India. Our Mobility Experts can also help craft bespoke, cost-effective relocation policies that are specialized to the modern relocator. We can guide you through the nuances of the Indian market and tailor our corporate relocation services to meet your specific needs, whether it's housing solutions, cultural training, or tax compliance.
By partnering with PerchPeek, you can confidently navigate the challenges of relocating employees to India, ensuring your staff settles in seamlessly and contributes to your organization's growth. Our goal is to make these transitions as effortless and stress-free as possible on your part (without breaking the bank!), allowing you to focus on your core business objectives.
In this rapidly globalizing world, India offers an abundance of opportunities, and with the right support, your company can thrive in this dynamic market by attracting and retaining the world’s best talent. Reach out to PerchPeek today to explore how we can help you facilitate successful employee relocations to India and unlock the full potential of this vibrant country. Your Indian Mobility Journey starts here!
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