Difference of Prices in India and United States
There is a huge price difference for many products between India and United States. India is a developing country with much higher inflation while US is most developed nation with negligible inflation. With the rise in inflation, prices of products keep on increasing; this is always felt hard by citizens. Many people in India believe US has a high standard of living and hence, prices are very high and it will be difficult for them to survive there.
Earning level in India and US
Indians usually compare the prices simply by multiplying the dollar price with 45, as $1 is equal to INR 45. Though, it is true to some sense, but not practically as economy and earning level in India and US has substantial differences. According to Wikipedia, per capita income in India is $1,265 (INR 57,000) per annum while per capita income in US is $47,132 (INR 2,100,000). You can easily see the difference in the earning levels which is almost 40 times more in US.
But it also does not mean that the value of INR 1 is equivalent to $1. In India, you can not buy any item in INR 1 except a little candy, whereas in United States you can buy several things in $1 like a bottle of water, an apple, can of soda and several other useful items. Obviously, $1 is worth much more than INR 1.
Per Capita Income in India
Per Capita Income in United States
Prices in India and US
If we calculate the value of $1 as INR 45, you will still find that many products are much cheaper in US in comparison to India. For example, a branded 40-inch LCD TV in India costs about INR 65,000 ($1,450), while the similar model in US costs just $900. Similarly, a French-door refrigerator in India costs around INR 80,000 ($1,800) while in US, similar refrigerator costs under $1,500.
There is a huge difference in the prices of electronic items even though the marketing costs are much less in India than in developed countries. In India, you can easily hire a full time marketing executive in $300 per month while in US, it might not be possible to hire such executive even for a week. It simply indicates these companies are simply exploiting the Indians and the Indian market, thereby making big bucks for them.
If per capita income of US is $47,132, then a person with professional job must be earning near to $80,000 while in India it will be near to $10,000 per annum. By this amount, a US citizen can buy 7 LCD TVs every month if he/she wants, while an Indian can not even buy 1 LCD TV in a month. Obviously, there are several products and items which are way costlier in US, but if you will take the earning differences into account, which is at least 8-10 times, then the prices in US will still be cheaper than India.
Does all this happens because Indians are not aware of global prices or is it the government that is charging number of taxes to make these products so costly. Even a developed country, with better income, has cheaper products and people in India are paying such high prices despite they have 40 times less per capita income. Isn’t that mean life in US or other developed country is quite easy and affordable than in a country like India where income level is so less and prices are so high. No one can even compare the benefits and infrastructure provided by developed countries than that in developing countries.
There should be a proper check and regulations provided by the government on the retail prices of different products, so as to benefit the Indian customers and not the so called Multi National Companies, which are taking huge margins.
- Tax Structure for Business in India
If you own a business in India, you will have to understand the Indian tax structure properly and pay several taxes.