Thank you Mike, a very comprehensive post. But I am a little puzzled.
If you convert £ to $ before leaving surely you will experience a loss on exchange rates. Then if you convert from $ to INR again there will be another loss on exchange rates.
Further, following your example, if you use $1 notes as tips, that means you are tipping 70p each time and yet you suggest changing down $20 to INR as soon as you arrive. Presumably to get lower denominations of INR
Obviously there will be some difference in just what you are tipping, according to the recipients status, so why convert to $ in the first place ? Just convert the £'s on site.
It seems a little strange and even a little confusing to try and work out from INR via $ to a currency (£) which your brain automatically works in. As you say the £ to INR is a very easy rate to understand, so why the complication of including $'s in the mix ?
I had a similar experience in Cuba last year and found that the Hotel exchange system worked well and I was able to directly understand the amount "spent" in £'s
Your point about souvenirs is duly noted. Being a photographer, most of my "souvenirs" will be digital, but I'm sure that there will be plenty in the group looking for something more material. Unfortunately this is a purely personal requirement. So does not help to make a considered reply.
So to answer you Chloe, is extremely difficult. I can only imagine the life standards in India and compare with what I experienced in Cuba last year. As I understand it two countries with similar social standards.
I took £700 with me and returned to UK with £450. However as I understand it we will be responsible for purchasing some meals and other options during the holiday, which was unnecessary for me in Cuba.
Therefore I intend to take around the same amount to India with me. Hopefully some of the Hotels will have a safe in the room, or in reception if you are uneasy carrying cash around with you.
Regardless of what decision you make, I'm pretty sure we will all have a fantastic holiday. 🙂