Including all items, the broader CPI showed a smaller gain in December in line with estimates, as energy prices declined, a Labor Department report showed Friday.
Analysts polled by Reuters had predicted December's consumer inflation rate would climb to 5.10 percent, the highest since July 2016, from 4.88 percent in November.
India's retail inflation in December accelerated to the highest in more than an year driven by quicker rises in the prices of food and housing, government data showed Friday.
Despite a cut in taxes, retail petrol prices have risen 5.6 percent and diesel by 9 percent since June in the Indian capital.
The retail inflation in the country has touched a new high of the last 17 months as Consumer Price Index (CPI) crossed the 5 per cent mark to settle at 5.21 per cent for the month of December 2017, which was 4.88 per cent a month ago.More news: Huge blaze erupts at Nottingham train station as crews scrambled
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Gold futures were higher Friday morning, extending 4-month gains ahead of what is expected to be a tame U.S. inflation report.
The indices of Industrial Production (IIP) for mining, manufacturing and electricity sectors for the month of November 2017 stood at 107.4, 127.5 and 140.1 respectively, with the corresponding growth rates of 1.1 percent, 10.2 percent and 3.9 percent as compared to November 2016.
The RBI, which has a medium-term inflation target of 4 per cent, has raised its inflation estimate to 4.3 per cent to 4.7 per cent for the six months through March.
Consumer inflation slowed in December to a tiny 0.1 per cent gain as energy costs retreated from a big jump in November.
Excluding food and energy, the so-called core consumer price index increased 1.8% from a year earlier after a 1.7% advance, including a 0.3% monthly gain that topped analyst projections and was the most in nearly a year.