Tier-2, Tier-3 Cities Driving India's Foreign Exchange Demand

India's foreign exchange demand is increasingly being driven by Tier-2 and Tier-3 cities, accounting for 53% of overall forex demand. According to Thomas Cook India's Forex Report 2026, Tier-1 cities, including metros, account for 47%. The report highlights that emerging India is driving the next phase of forex growth, with Tier-2 and Tier-3 cities contributing over half of overall demand.

Leisure travel remains the biggest driver of forex demand, accounting for 57%, followed by corporate travel at 27% and student travel at 16%. The report notes that younger consumers are a significant part of the forex market, with those aged 25-40 years accounting for the largest share at 37%, closely followed by those aged 41-60 years at 36%. Senior travellers continue to remain an important contributor to outbound forex demand.

The United States remains the biggest currency market, with the US dollar accounting for 49% of forex demand. Europe, represented by the euro and British pound, accounts for 23%, while Asian currencies account for 11%. The report also highlights increasing digital adoption in forex purchases, with digital channels accounting for 25% and DIY platform usage growing 50% year-on-year over the last two years.