Amongst Indian cities, Bangalore (139) ranks higher than New Delhi (143), Mumbai (146), Chennai (150) and Kolkata (151) in overall quality of living, according to Mercer's 2012 Quality of Living Index.
"Bangalore's rise in its quality of living ranking can be attributed to positive ratings for international schools which are suitable for expatriates," the report said.
In terms of city infrastructure, however, Mumbai (134) was ranked highest among Indian cities followed by Kolkata (141), New Delhi (153), Chennai (168), Bangalore (170).
The Vidhana Soudha in Bangalore
However, no Indian city could manage to find a place in the global list, which was topped by Vienna and was followed by Zurich and Auckland in second and third place, respectively.
Other cities in the top 10 include Munich in fourth place, followed by Vancouver (5th). Dusseldorf dropped one spot to rank sixth followed by Frankfurt (7th), Geneva (8th), Copenhagen (9th), and Bern and Sydney tied in 10th place.
Indian cities do not fare well compared to their global peers in the list.
Among Asia Pacific cities, Australian and New Zealand cities rank higher on the index with Sydney (11), Wellington (13), Melbourne (18) and Perth (21) following Auckland (3).
Globally, the cities with the lowest quality of living are Khartoum, Sudan (217); N Djamena, Chad (218); Port-au-Prince, Haiti (219); and Bangui, Central African Republic (220).
Baghdad, Iraq (221) ranks last. Mercer's Quality of Living index list covers 221 cities, ranked against New York as the base city.
"In order for multinational companies to ensure their expatriates are compensated appropriately and an adequate hardship allowance is included in compensation packages, they must be aware of current events and local circumstances," Mercer Senior Researcher Slagin Parakatil said.
"Factors such as internal stability, law enforcement effectiveness, crime levels and medical facilities are important to consider when deciding on an international assignment, and the impact on daily life that could be encountered by the expatriate in overseas placements," Parakatil added.