Rising fuel prices boosted Indian inflation in September to 7.8 percent, its highest level since November, undermining the government's case for a central bank interest rate cut this month to boost the sluggish economy.
The rise in the wholesale price index - India's main inflation gauge - was more than expected. Economists in a Reuters poll had expected an inflation reading of 7.7 percent, up from 7.55 in August.
The Reserve Bank of India (RBI) has held its policy rate at 8 percent since April, even though economic growth is at its weakest in three years, saying stubbornly high inflation prevents it from cutting borrowing costs. Inflation is well above the central bank's comfort level of 4-5 percent
Monday's data showed that fuel prices in September rose 11.9 percent from a year earlier, a sharp pick-up compared with a rise of 8.32 percent in August.
India's expects the country's exports to fall by around 10% this year because of the slowdown in Europe and the U.S.
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