India’s Forex Demand Expands Beyond Metros as Tier-2 and Tier-3 Cities Capture 53% Market Share
India’s foreign exchange demand is increasingly driven by smaller urban centres, with tier-2 and tier-3 cities accounting for over half of the total demand, according to Thomas Cook India’s Forex Report 2026. These cities contributed 53% of forex demand, with tier-2 cities alone making up 41% and tier-3 cities 12%. In contrast, tier-1 cities, including major metros, represented 47% of the demand.
The report highlights that leisure travel is the primary driver of forex transactions, constituting 57% of the total. Corporate travel accounted for 27%, while student travel made up 16%. The data indicates a diverse demand across leisure, business, and educational travel, with leisure travel remaining the dominant segment.
Travellers aged 25-40 lead demand
The 25-40 age group is the largest contributor to forex usage, representing 37% of the demand. Close behind are travellers aged 41-60, who account for 36%. Those over 60 years contribute 21%, while the youngest group, aged 18-24, makes up 6% of forex demand. The report notes that millennials and Gen X together account for nearly three-fourths of forex usage, with senior travellers also playing a significant role in outbound forex demand.
Dollar accounts for nearly half of forex demand
The US dollar remains the most popular currency, making up 49% of overall forex demand. Currencies from Europe, including the euro and British pound, account for 23%. Asian currencies, such as the Thai baht and Japanese yen, contribute 11%, while the UAE dirham and Saudi riyal represent 9% of the total. Australian and New Zealand currencies account for 5%, with Canada making up the remaining 3%.
The report also notes a shift towards digital forex purchases, although branch-assisted transactions are still preferred, comprising 75% of purchases. Digital channels now account for 25% of transactions, with digital forex adoption increasing by 25% year-on-year and DIY platform usage rising by 50% over the last two years.
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