Inflation slipped back to zero last month amid a round of womenswear summer sales and as a run of falling food prices reached its longest stretch for 15 years.
The data come a day after the retail inflation for the same month rose to an 8-month high of 5.4%.
Deflationary trends continued for the eighth month in a row in June with the wholesale price- inflation slipping to (-)2.4%, largely due to cheaper vegetable and fuel prices.
Economists expect official figures published on Tuesday morning to show inflation on the consumer price index (CPI) measure dipping back to zero in June, from 0.1% in May.
However, pulses got dearer by 33.67% as against 22.84% in the previous month.
The consumer price index data also showed that rural areas were relatively impacted more with an annual retail inflation rate of 6.07 per cent, against 4.55 per cent for urban areas.
Among others, milk and its products were costlier by 7.18% in June over the same month past year.
Prices of protein-rich items such as “meat and fish” rose by 7.15 per cent, while spices turned costlier by 9.44 per cent in the month.
Among other categories, oils and fats prices rose by 3.06 per cent, cereals and products by 1.98 per cent, while that of egg rose by 5.09 per cent in June.
Though the surge in food prices is expected to keep RBI from cutting rates, softening crude prices may prevent the inflation from going beyond the 6 per cent target that the bank has set for January 2016.
The uptick in the CPI will be a major concern for the Indian industry, as it belies the hope of a future rate cut by the Reserve Bank of India (RBI).
The index for primary articles slid 0.76 percent annually in June, slightly slower than prior month’s 0.77 percent decline.
The RBI had lowered its short-term lending rate by 25 basis points in its monetary policy review in June.