This could clear the way for another rate cut by the Reserve Bank of India, which slashed rates from 6.5% to 6.25% after its monetary policy meeting on Feb. 7.

Rural inflation stood at 4.64% compared to 5.76% in December, while urban inflation cooled to 3.87% in January as against 4.58% in the previous month. The fall in inflation is expected to provide relief to many Indian households, who spend a large chunk of their budgets on food.

The Consumer Price Index (CPI)-based retail inflation slowed to a five-month low of 4.31 per cent in January from 5.22 per cent in December, aided by a slowdown in food prices, data released by the Ministry of Statistics and Programme Implementation (MoSPI) said on Wednesday.

India's retail inflation eased to a five-month low of 4.31% in January from 5.22% in December as food price inflation declined, government data released on Wednesday showed. Annual retail inflation in January was lower than economists' estimate of 4.

This significant decrease in inflation is a positive sign for the Reserve Bank of India, which recently reduced the repo rate by 25 basis points to 6.25%. In October, retail inflation in India had surged to a 14-month high of 6.2%, with food inflation reaching a 15-month peak of 10.9%.

India's retail inflation slowed to a five-month low in January as food price inflation eased, boosting the odds of another rate cut in the South Asian economy where growth is slowing amid the escalating threat of a global trade war.

The top five items showing the highest year on year Inflation at the All India level in January are coconut oil (54.20 per cent), potato (49.61 per cent), coconut (38.71 per cent), garlic (30.65 per cent),