That inflation print will likely offer more scope for the Reserve Bank of India to continue cutting the interest rates.

The deceleration in prices has been driven by a sharp fall in food inflation, plus favourable base effects and muted rise in key household categories.

India inflation is likely to average around 2.5 per cent for the next six months, lower than the RBI's forecast of 3.5 per cent, an HSBC report said on Friday. The June inflation print is trending a tad lower than May levels.