India's wholesale-price index slowed to +5.05% on year in January from +6.2% in December and was below forecasts of 5.6%.
The WPI data adds to a reading which showed that CPI eased to +8.8% last month from +9.9% in December.
The falling inflation comes as the Reserve Bank of India focuses on reducing consumer prices, with the RBI hiking interest rates three times since September.
However, economist Suvodeep Rakshit says that with inflation softening, "there is no case for raising rates" at this time. "At the same time, given that core inflation is still high, the central bank won't have room to cut rates."
The Sensex is +0.2% and the USD-INR is +0.2% 62.285 rupees.