Smaller Cities Now Drive Over Half of India's Forex Demand

India's foreign exchange market is no longer dominated by its biggest metros. According to Thomas Cook India's Forex Report 2026, Tier-2 and Tier-3 cities together now account for 53% of the country's total forex demand, signalling a broadening of outbound travel and currency exchange activity beyond traditional metropolitan centres.

The report, based on transaction data from April 2025 to March 2026, shows Tier-1 cities (including metros) contribute 47% of forex demand. Tier-2 cities account for 41%, while Tier-3 cities add another 12%. The findings highlight the growing role of emerging India in shaping the forex landscape.

Leisure travel remains the largest driver, contributing 57% of forex demand, followed by corporate travel at 27% and student travel at 16%. This mix indicates a diversified demand base, with business travel and overseas education also sustaining growth.

Age-wise, consumers between 25 and 40 years form the biggest segment at 37%, closely followed by those aged 41-60 at 36%. Travellers over 60 account for 21%, while the 18-24 age group makes up just 6%. Millennials and Gen X together represent nearly three-fourths of forex usage.

In terms of currencies, the US dollar leads with 49% of demand. European currencies (euro and pound) account for 23%, Asian currencies (including Thai baht, Singapore dollar, yen, dong, and rupiah) for 11%, Middle Eastern currencies (dirham and riyal) for 9%, Australian and New Zealand currencies for 5%, and the Canadian dollar for 3%.

Digital adoption is also rising. While branch-assisted purchases still dominate with a 75% share, digital channels account for 25%. Digital forex adoption has grown 25% year-on-year, and DIY platform usage has surged 50% year-on-year over the last two years, pointing to a gradual shift toward digital-first transactions among Indian travellers.