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Tier-2 and Tier-3 cities drive 53% of India’s forex demand, Thomas Cook India says
Our read
India’s next forex growth pool will be non-metro and hybrid: branches will remain the trust anchor, while digital ordering becomes the acquisition and repeat-purchase layer.
For operators
Prioritize forex inventory, localized marketing and assisted-digital journeys in Tier-2 and Tier-3 cities, where 53% of demand is emerging even as branches retain 75% of purchase volume.
Watch
Growth in passport issuance, international flight departures and visa applications from non-metro catchments.
The report,
Thomas Cook India reports Tier-2 and Tier-3 cities generate 53% of forex demand, led by leisure travel. Digital forex purchases represent 25% of transactions and are growing, highlighting expanding travel-spend potential beyond metros.
Channel facts
From the report. Source details below
| Tier-2 cities: | 41% |
|---|---|
| Tier-3 cities: | 12% |
| Tier-1 cities: | 47% |
| Leisure travel: | 57% of forex demand |
Signals to track
- Digital forex share moving above 30% of purchases, especially in Tier-2 cities.
- Branch transaction growth versus online order growth and the proportion of online orders fulfilled through branch pickup.
- RBI or regulatory changes affecting forex documentation, digital KYC, prepaid cards, cash delivery or authorized-dealer distribution.
- Promotional pricing and distribution expansion by banks, neobanks, travel OTAs and fintech forex platforms.
The counter-case
The case against this reading — not reported by the source.
The headline may overstate a structural shift: Tier-2/3 demand share could reflect a larger population base, post-pandemic catch-up travel, or Thomas Cook’s branch footprint rather than superior per-capita spending or a durable migration away from metros. With 75% of purchases still branch-led, digital growth may be incremental convenience rather than evidence of a genuinely omni-channel, scalable consumer behavior change.