India's retail inflation rate accelerated to a four-month high of 4.87 percent in May, government data showed on Tuesday, driven by higher fuel prices and a depreciating rupee.
May was the seventh straight month in which inflation was higher than the central bank's medium-term target of 4 percent.
The Reserve Bank of India (RBI) last week raised its benchmark interest rate for the first time since 2014, by 25 basis points to 6.25 percent, citing inflation concerns.
The RBI revised up its inflation forecast to 4.7 percent for the second half of the fiscal year ending in March 2019, from the 4.4 percent it projected earlier.
Meanwhile, India's industrial output grew 4.9 percent in April from a year earlier, driven by a pick up in manufacturing, government data showed on Tuesday.
Manufacturing, which contributes 78 percent of industrial output, grew 5.2 percent in April, up from a 4.7 percent rise in March, as domestic demand picked up.
The Indian economy grew 7.7 percent year-on-year in January-March, its quickest pace in nearly two years driven by higher growth in manufacturing, the farm sector and construction, data showed last month.
The figure surpassed China's growth rate of 6.8 percent in the January-March quarter, confirming India as the fastest growing major economy and economists expect the growth to be robust in the 2018/19 financial year that began in April.