Tier-2 Cities Drive Shift in India's Foreign Exchange Demand

India's foreign exchange demand is shifting from major metropolitan centers to Tier-2 and Tier-3 cities, according to Thomas Cook India's Forex Report 2026. The report found that these smaller cities account for 53% of overall forex demand, up from a previous share of just 12%. Tier-1 cities, including metros, accounted for 47% of forex demand.

The trend points to a broadening of India's outbound travel and foreign exchange market beyond the country's traditional metropolitan centers. The report highlights that leisure travel remains the biggest driver of forex demand, accounting for 57%, followed by corporate travel at 27% and student travel at 16%. Younger consumers are also increasingly contributing to the forex market, with those aged 25-40 years making up 37% of forex usage.

The US dollar remained the most popular currency, accounting for 49% of forex demand, followed by the euro and British pound at 23%, and Asian currencies such as the Thai baht and Singapore dollar at 11%. The report also notes an increasing shift towards digital channels for forex purchases, with digital adoption growing 25% year-on-year.