Small and mid-sized Indian cities now account for over half of forex demand, signalling a significant shift in outbound travel and currency exchange patterns amid rising digital adoption.
India’s foreign exchange market is no longer being shaped mainly by the big metros. Thomas Cook India’s Forex Report 2026 says Tier-2 and Tier-3 cities together now account for 53 per cent of overall forex demand, slightly ahead of the 47 per cent coming from Tier-1 centres, including the major metropolitan areas. The company based the report on transaction data from April 2025 to March 2026 across leisure, education and corporate travel.
The shift reflects a wider change in outbound travel, with smaller cities taking a larger role in overseas spending. India Today reported earlier this year that non-metro consumers are becoming a key force in that market, with travellers from smaller centres increasingly planning international trips and choosing packaged holidays. Thomas Cook’s data suggests that trend has continued to gather pace.
Leisure travel remained the main source of demand, accounting for 57 per cent of forex purchases. Corporate travel made up 27 per cent, while student travel contributed 16 per cent. The report also points to a broad age base: people aged 25 to 40 formed the biggest group at 37 per cent, closely followed by those aged 41 to 60 at 36 per cent. Travellers over 60 accounted for 21 per cent, while those aged 18 to 24 made up 6 per cent.
The US dollar stayed the dominant currency, representing 49 per cent of demand. Europe, measured through the euro and pound sterling, accounted for 23 per cent, while Asian currencies such as the Thai baht, Singapore dollar, Japanese yen, Vietnamese dong and Indonesian rupiah made up 11 per cent. The Middle East contributed 9 per cent, Australia and New Zealand 5 per cent, and Canada 3 per cent.
Thomas Cook also said digital buying is gaining ground, even though branch-assisted transactions still made up 75 per cent of purchases. Digital channels accounted for the remaining 25 per cent, with online use up 25 per cent year on year and do-it-yourself platform activity rising 50 per cent over the past two years. That suggests Indian travellers are slowly moving towards a more digital foreign exchange market, even as traditional assisted sales remain dominant.
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