Considerable population increases in Mumbai and New Delhi in recent decades have increased existing problems, including access to clean water, air pollution and traffic congestion," the report said in its assessment for India.
Slagin Parakatil, principal at Mercer, said: "These so called second-tier emerging cites are investing, particularly in infrastructure to improve their quality-of-living standards and ultimately attract more foreign companies."
Vienna topped the charts as the world's best in terms of quality of living, followed by Zurich, Auckland, Munich and Vancouver in the top five.
Overall, European cities dominate the top of the ranking, with Singapore (26) the highest-ranking Asian city, whereas Dubai (74) ranks first across the Middle East and Africa. Montevideo in Uruguay (78) takes the top spot for South America.
The Mercer rankings are based on assessment across 10 categories, including political, economic and social environment as well as housing and medical provisions.
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