Soaring airfares and flight disruptions amid the West Asia conflict are hitting India’s forex remittance market, which is heavily dependent on outbound travel to the Middle East, according to a senior official at Niyo, a travel fintech platform focused on cross-border payments and travel banking.
“It’s (War) actually happening at a very very wrong time because this is actually a peak season,” said Sai Sankar, Chief Business Officer, Niyo Forex. He added that April, May and June see a surge in travel due to school vacations and summer holidays, followed by another peak during Diwali and towards December.
“Roughly around 45% of the outbound travel is to the Middle East which is actually at the crux of the war today,” he said. He, however, did not quantify the impact on Niyo’s business or the industry.
Middle East Crisis
The ongoing conflict involving Iran has disrupted global aviation, with key transit hubs such as Dubai, Doha and Abu Dhabi operating at reduced capacity. These hubs serve as critical connectors between Europe, Asia and Africa, and their disruption has led to widespread cancellations, rerouting of flights and delays, significantly altering travel patterns. The Middle East accounts for about 5% of international tourist traffic and 14% of global transit traffic.
Sankar also added the restrictions in ship movements through Strait of Hormuz, which have also pushed up fuel prices, making air tickets more expensive. Travellers are increasingly opting for longer routes, while many are cancelling their trips, he said.
Rising Costs
Air India has already introduced a fuel surcharge amid the conflict, which is driving up jet fuel prices and making air travel costlier for passengers. IndiGo also announced that it will levy revised fuel charges ranging from ₹275 to ₹10,000 on domestic and international flights from April 2, following the rise in jet fuel prices.
Sankar, however, expects a post-Covid-like rebound in travel demand once the conflict subsides.
Niyo offers a suite of travel banking services, including forex cards, forex cash and remittances through Niyo Forex, along with value-added services such as flights, hotels, visas, eSIMs and travel insurance. The company entered Chennai with a new branch as part of its plan to build a 50-branch network nationwide.
India’s outward remittances under the RBI’s Liberalised Remittance Scheme (LRS) stood at $29.56 billion in FY25, with over 57% attributed to travel spends. In the April–January period of FY26, remittances moderated by 4.01% year-on-year to $24.04 billion. Niyo is targeting a 10–15% share of India’s outbound forex market, which is estimated to reach $45 billion over the next 18 months.