Retail inflation rose to 6.93 per cent in July from 6.09 per cent in the previous month as food prices continued to soar due to disrupted supply chains, government data showed on Thursday.
Food inflation worsened to 9.62 per cent in July from 8.72 per cent in June.
July inflation was higher than the 6.15 per cent forecast in a Reuters poll of analysts.
Inflation remained above the Reserve Bank of India's medium term range of 4-6 per cent. RBI sets the key interest rate based on inflation trends and with the inflation remaining above the RBI's target range, the central bank is going to keep rates on hold, analysts said.
Earlier this month, RBI had left the repo rate and other key policy rates unchanged at existing levels taking stock of a recent rise in consumer inflation, and said it would ensure retail prices are contained within its medium-term target going forward.
Governor Shaktikanta Das had warned that India's headline inflation is expected to remain elevated during the second quarter (July-September) of the current fiscal year and may subside thereafter.