Tier-2 and Tier-3 Cities Drive 53% of India’s Forex Demand: Thomas Cook Report
Foreign exchange demand in India is experiencing a geographical shift away from major metropolitan centres, with smaller cities generating more than half of the country’s total requirement. According to Thomas Cook India’s Forex Report 2026, non-metro locations now represent 53% of overall foreign exchange demand, underscoring rising outbound travel and expenditure from emerging urban centres.
What Happened
Data from Thomas Cook India’s Forex Report 2026 reveals that tier-2 and tier-3 cities accounted for a collective 53% of India’s foreign exchange demand during the analyzed period. Tier-2 cities alone formed 41% of total demand, while tier-3 towns contributed 12%. By contrast, tier-1 cities, which include metropolitan areas, made up 47%.
According to the report, outbound forex demand was distributed among holidays, business trips, and overseas education, with holiday and leisure journeys serving as the single largest contributor.
Key Highlights
- Geographic Distribution: Tier-2 cities held 41% of demand, tier-3 cities generated 12%, and tier-1 metropolitan cities represented 47%.
- Purpose of Transactions: Leisure travel drove 57% of forex purchases, corporate travel made up 27%, and overseas student travel accounted for 16%.
- Age Groups: Individuals aged 25 to 40 contributed 37% of demand, followed closely by the 41 to 60 age category at 36%. Senior travellers over 60 years accounted for 21%, while the 18 to 24 age bracket represented 6%.
- Currency Breakdown: The US dollar dominated with 49% of purchases, European currencies (euro and British pound) represented 23%, Asian currencies accounted for 11%, Middle Eastern currencies made up 9%, Australian and New Zealand currencies took 5%, and the Canadian dollar contributed 3%.
- Purchase Channels: Branch-assisted transactions remained the primary medium at 75%, while digital purchases stood at 25%. Digital adoption rose 25% year-on-year, and usage of do-it-yourself (DIY) platforms increased 50% year-on-year over the past two years.
Why This Matters
The findings indicate a broadening base of international spending across India. Together, Gen X and millennial demographics—covering travellers between 25 and 60 years of age—represented nearly three-quarters of total forex transactions. Furthermore, although assisted transactions through physical branches still lead with 75% of purchases, digital and DIY channels are recording multi-year growth, showing an evolving preference toward digital-first transactions among outbound travellers.
What to Watch Next
As digital forex channels continue expanding, the ongoing shift toward DIY platforms and the ongoing rise of leisure journeys from emerging markets will remain key trends to track in India’s outbound forex sector.
Frequently Asked Questions
Which cities generated the majority of India’s forex demand?
Tier-2 and tier-3 cities combined to generate 53% of total forex demand, with tier-2 centres contributing 41% and tier-3 centres making up 12%.
What was the primary reason for foreign exchange purchases?
Leisure travel was the dominant category, accounting for 57% of total forex transactions, followed by business travel at 27% and education at 16%.
Which foreign currency was the most popular?
The US dollar was the most sought-after currency, accounting for 49% of all foreign exchange transactions covered in the report.
Source: Based on information reported by The Times of India citing Thomas Cook India’s Forex Report 2026.