June retail inflation saw a rise for the first time in five months. CPI for June stood at 4.81% versus 4.31% in May. This is higher than the 4.6% that economists were estimating.
One of the main reasons for this increase in inflation is higher vegetable prices over the past few weeks, especially tomatoes. Food inflation went up to 4.49% in June. Within food inflation, segments which witnessed a spike include eggs, pulses and cereals
Experts also say that July will likely see the remainder of the higher prices get factored in.
CPI has been within RBI's tolerance band of 2% to 6%, however it remains above the central bank's medium term target of 4%.
Last month the RBI monetary policy committee kept the repo rate unchanged at 6.5% but had cautioned that the battle against inflation was not yet won and action on rates would be taken depending on what the data indicates.
Meanwhile, India's Industrial Production Index came in better than expected. IIP rose to 5.2% for the month of May. IIP is an index that shows the performance of the various core sectors of the economy and reflect that state of economic activity in the country.