India's August retail inflation was slightly higher than economists' expectations, on the back of a sharp rise in vegetable prices, according to government data released on Thursday.
Annual retail inflation was 3.65% in August, compared with a revised 3.60% in July. Economists polled by Reuters had forecast August inflation at 3.5%.
India's key inflation gauge slipped below the Reserve Bank of India's target of 4% in July after a gap of nearly five years, largely due to the high-base effect.
Prices of food, which account for nearly half of the retail inflation, rose 5.66% in August, compared to a 5.42% rise in the previous month.
Vegetable prices rose 10.71% year-on-year in August against a 6.83% rise in the previous month.