India's wholesale price index (INWPI=ECI) fell 0.52 per cent in August from a year earlier, according to government data released on Thursday.
Economists polled by Reuters had estimated the wholesale price index for August would fall 0.6 per cent. It fell 1.36 per cent in July.
In August, fuel and power prices fell 6.03 per cent from a year earlier, compared with a fall of 12.79 per cent in July, and prices of primary articles rose 6.34 per cent versus a rise of 7.57 per cent.
Food prices rose 5.62 per cent year-on-year, compared with a sharp rise of 7.75 per cent in July and manufactured product prices fell 2.37 per cent in August, against a 2.51 per cent fall the previous month.
On Tuesday, data showed India's retail inflation (INCPIY=ECI) eased in August as food prices moderated, but remained above the upper end of the central bank's target band for a second consecutive month, keeping policymakers watchful.
Earlier this month, Reserve Bank of India (RBI) Governor Shaktikanta Das said India's monetary policy committee would remain watchful of the evolving inflation situation, but the recent spikes in vegetable prices would start to ebb.