India’s foreign exchange demand is no longer isolated in the country’s biggest cities, with smaller urban centres accounting for more than half of the total demand, according to Thomas Cook India’s Forex Report 2026.Tier-2 and tier-3 cities together made up 53% of forex demand during the period covered by the report. Tier-2 cities alone accounted for 41%, while tier-3 cities contributed 12%. In comparison, tier-1 cities, including metros, accounted for 47%.“Emerging India is driving the next phase of forex growth, with Tier 2 and Tier 3 cities contributing over half of overall demand,” the report said.The data also showed that leisure travel was responsible for the largest portion of forex demand. It accounted for 57% of transactions, while corporate travel contributed 27% and student travel 16%.According to the report, demand was spread across leisure travel, business travel and overseas education, with leisure travel remaining the dominant segment.

Travellers aged 25-40 lead demand

The 25-40 age group emerged as the largest contributor to forex usage, accounting for 37% of demand. Travellers aged 41-60 were close behind, with a 36% share.Those aged above 60 years accounted for 21%, while the youngest category, travellers aged 18-24, represented 6% of forex demand.“Millennials and Gen X together account for nearly three-fourths of forex usage,” the report said.It also said senior travellers continued to make an important contribution to outbound forex demand.

Dollar accounts for nearly half of forex demand

The US dollar remained the most sought-after currency, accounting for 49% of overall forex demand.Currencies used across Europe, represented by the euro and British pound, accounted for 23%. Asian currencies including the Thai baht, Singapore dollar, Japanese yen, Vietnamese dong and Indonesian rupiah, made up 11%.The UAE dirham and Saudi riyal led demand from the Middle East, which accounted for 9% of the total. Australian and New Zealand currencies contributed 5%, while Canada accounted for the remaining 3%.The report also recorded a shift towards digital forex purchases, although branch-assisted transactions remained the preferred channel, accounting for 75% of purchases.Digital channels made up the remaining 25% of purchases. Digital forex adoption across Thomas Cook India’s channels increased 25% year-on-year, while usage of DIY platforms rose 50% year-on-year over the last two years.The report said this reflected a gradual move towards digital-first forex transactions among Indian travellers.