Cash crunch hits India's jewellery retailers; gold demand set to tumble

Singapore

A SELF-IMPOSED cash shortage in India is creating chaos for jewellery retailers in one of the world's biggest gold-buying countries. Sales are plunging.

Just ask Renita Ferreira. While her Feb 24 marriage ceremony has been set for a year, she and her fiance haven't bought wedding rings, even after many trips to stores in Panaji, the capital of the western state of Goa. A majority of retailers aren't equipped to accept credit cards because India's jewellery industry runs mostly on cash, something consumers have a lot less of these days.

In November, the government banned what amounts to half the circulated cash, part of a plan to curb corruption and tax evasion. The move cut purchases of everything from cars to soap in a country where 98 per cent of consumer…