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It is favorable to carry cash and some amount in travelers cheque for backup. You can easily exchange foreign currency for INR at various money exchange centers in India. In any holiday tour to India dinner is not included please budget for approximately $35/£20 per person for an evening meal without alcohol. You will in general find meals very good value for money with a broad choice of cuisine in most hotels throughout your tour (Western and Asian). In remote and outlying areas of India you will find mainly local cuisine.
Note: The above information is correct and valid at the time of publication, to the best of our knowledge.