India's inflation rate fell to a two-year low of 6.55% in January, pulled down by slumping food prices prompting economists to predict that Reserve Bank of India may slash interest rates in its monetary policy review next month. Wholesale price index-based inflation was 7.47% in December.
Non-food manufactured goods inflation also eased to a one-year low of 6.7% - it was 7.7% in the previous month - but it still remains elevated.
Finance minister Pranab Mukherjee said he was confident inflation would continue to moderate. "The main worry going forward is on edible oils, milk and some animal proteins which may continue to threaten food inflation," he said.