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Difference of Prices in India and United States

Updated on February 19, 2013

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.

Earning Levels

Per Capita Income in India
Per Capita Income in United States
According to Wikipedia for year 2010.

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.

Some Assumptions

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.

Do you also believe that life in developed countries is far easier than in developing countries?

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    • anujagarwal profile image

      Anuj Agarwal 6 years ago from Noida

      I appreciate your concerns Jed but if you will exclude income of large cities, then in India, the per-capita income will be much under $500. But the prices of different products are almost same all over country. And regarding dollar manipulation, you must be having better knowledge and above all, it is all political gimmicks.

    • Jed Fisher profile image

      Jed Fisher 6 years ago from Oklahoma

      The per-capita income figure in America is misleading at best. Less than 2% of Americans receive more than half of the income; take them out of the figures, and the per capita income amount goes down considerably. Also consider, many of the US residents who earn more than 100K live in only the largest cities, such as Los Angeles and New York City. Take them out of the mix, and US per-capita income drops like a stone, to about 22,000 US Dollars. (That's ten dollars an hour. Not rich at all.)

      The cause of price disparity is a function of currency manipulation, where the US Dollar is grossly overstrength, a mechanism intended to drain wealth out of America and transfer that wealth to developing economies. In particular, Communist China. Hence, the lower classes in America get crushed by unemployment while the lower classes overseas have to work their little butts off to survive, 12 hours a day, 7 days a week.