A significant transformation is underway in India’s foreign exchange landscape, as demand for forex is increasingly driven by smaller urban centers rather than solely concentrated in metropolitan areas. The recent Forex Report 2026 by Thomas Cook India reveals that cities categorized as Tier-2 and Tier-3 now collectively account for a substantial 53% of the total foreign exchange demand. Specifically, Tier-2 cities alone contribute a significant 41%, with Tier-3 cities adding another 12%. This shift highlights a burgeoning “Emerging India” that is now the primary catalyst for the nation’s next phase of foreign exchange growth, surpassing the 47% share held by traditional Tier-1 cities, including major metros.
A detailed analysis of the demand patterns indicates that leisure travel remains the most dominant segment, comprising a considerable 57% of all foreign exchange transactions. This far outweighs the 27% contribution from corporate travel and the 16% attributed to student travel, suggesting a growing appetite among Indians for international recreational experiences.
Demographically, the 25-40 age group stands out as the leading consumers of foreign exchange, accounting for 37% of the total demand. Hot on their heels are travelers aged 41-60, contributing a robust 36%. Even those over 60 years old play a significant role, representing 21% of the demand, while the youngest cohort, individuals aged 18-24, accounts for 6%. This data underscores that millennials and Gen X collectively drive nearly three-quarters of all foreign exchange usage, with senior travelers also maintaining their crucial contribution to outbound foreign exchange demand.
In terms of currency preferences, the US dollar continues to reign supreme, making up a dominant 49% of the overall foreign exchange demand. European currencies, including the Euro and British Pound, collectively secure 23% of the market. Asian currencies, such as the Thai Baht, Singapore Dollar, Japanese Yen, Vietnamese Dong, and Indonesian Rupiah, collectively represent 11%. The Middle Eastern market, primarily driven by the UAE Dirham and Saudi Riyal, accounts for 9%, while Australian and New Zealand currencies contribute 5%. The remaining 3% is attributed to Canadian currency.
Despite a noticeable trend towards digital platforms, branch-assisted transactions still remain the preferred method for purchasing foreign exchange, making up 75% of all transactions. However, the report also acknowledges a significant and accelerating shift towards digital adoption. Digital channels now account for 25% of purchases, and within Thomas Cook India’s ecosystem, digital foreign exchange adoption has surged by 25% year-on-year. Furthermore, the usage of DIY (Do-It-Yourself) platforms has experienced an impressive 50% year-on-year increase over the past two years, signaling a gradual but definitive move towards digital-first business transactions among Indian travelers.
