Thomas Cook India's Forex Report 2026 finds smaller cities have overtaken metros in foreign exchange demand, powered by leisure travel and rising digital adoption.
India's foreign exchange market is undergoing a marked geographic shift, with tier-2 and tier-3 cities now accounting for 53 per cent of the country's forex demand, surpassing tier-1 cities and metros, which contribute 47 per cent, according to a new study by Thomas Cook (India). The findings, based on transaction data collected between April 2025 and March 2026, were first reported by The Economic Times and have since been carried by Navbharat Times and referenced in a Times of India business summary. The report attributes the shift to rising outbound leisure travel, overseas education, corporate mobility and changing payment preferences, particularly among younger travellers turning to digital forex channels.
The data mark what Thomas Cook India describes as an expanding geographic base for forex demand in the country, with smaller urban centres emerging as significant contributors rather than peripheral markets. Within the tier-2 and tier-3 combined share of 53 per cent, tier-2 cities alone account for 41 per cent of demand, while tier-3 cities contribute 12 per cent, according to the report cited by Economic Times and Navbharat Times.
Smaller Cities Overtake Metros In Forex Transactions
The scale of the shift is notable given that metros have traditionally been viewed as the primary hubs for foreign exchange activity in India. Navbharat Times, in its Hindi-language coverage of the same Thomas Cook India Forex Report 2026, explicitly stated that smaller cities have surpassed metros in forex demand, framing it as evidence of an emerging India driving the next phase of forex market growth.
The Times of India's business page summary echoed this framing, describing smaller towns as emerging from the shadows of larger cities to contribute over half of the country's total foreign exchange demand. No dissenting data or conflicting figures were found across the outlets that covered the report, with Economic Times, Navbharat Times and a LinkedIn news brief all citing the same 53 per cent figure and underlying tier-wise breakdown.
Leisure Travel Emerges As The Dominant Driver
Purpose-wise data from the Thomas Cook India study show leisure travel as the single largest driver of forex demand, accounting for 57 per cent of total transactions. Corporate travel followed at 27 per cent, while overseas education and student-related travel made up the remaining 16 per cent, according to figures reported by both Economic Times and Navbharat Times.
The Times of India summary specifically highlighted travellers aged 25 to 40 as being at the forefront of this leisure-travel-driven growth. Despite the digital shift underway across the market, holiday travellers continue to show a strong preference for physical cash, which accounts for 75 per cent of transactions in the holiday segment, according to the LinkedIn brief summarizing the Economic Times report. At the same time, forex cards represent 39 per cent of the total value loaded for overseas spending, indicating that stored-value cards remain important for higher-ticket international expenditure even as cash dominates transaction volume.
Digital Adoption And The US Dollar's Continued Dominance
A parallel trend identified in the report is the accelerating shift toward digital forex channels, particularly among younger consumers. According to the LinkedIn brief, roughly 25 per cent of customers now transact digitally, with travellers aged 18 to 24 identified as the fastest adopters of digital-first and self-serve forex journeys. Senior travellers, meanwhile, continue to make a significant contribution to overall forex demand, indicating the market remains broad-based across age groups even as younger cohorts lead digital uptake.
Despite this digital growth and the diversification of demand across city tiers, the US dollar remains the most preferred currency among Indian travellers. Navbharat Times reported that the dollar accounts for 49 per cent of total forex demand, the highest share of any currency, with the euro and pound sterling also cited as popular choices, though without specific percentage figures. The Economic Times coverage additionally noted a growing preference for destination-specific currencies, suggesting that more customers are now buying the currency of their actual travel destination rather than defaulting to dollars, a pattern linked to rising outbound travel to a wider range of countries.
Thomas Cook India's Reading Of The Shift
Deepesh Verma, Chief Business Officer for Foreign Exchange at Thomas Cook (India), was quoted in the LinkedIn brief summarizing the Economic Times report as saying the findings highlight a significant shift in consumer behaviour, from the rapid rise of digital-first and self-serve forex journeys to growing participation from tier-2 and tier-3 markets and increasing preference for destination-specific currencies. His comments represent the most direct interpretive statement tied to the report's findings.
The report does not point to any regulatory or policy response linked to the study, with coverage treating it as market intelligence reflecting evolving consumer behaviour rather than a trigger for immediate government action. The consistent data across Economic Times, Navbharat Times, the Times of India summary and the LinkedIn brief suggest the findings are being read industry-wide as a signal that banks, non-bank forex providers and travel companies may need to expand digital onboarding and product offerings tailored to smaller cities to capture the next phase of outbound travel growth.
