The Reserve Bank of India has raised interest rates again in an attempt to curb inflation. It was the seventh rise in a year.
The rate at which the central bank loans to commercial banks from 6.25% is now 6.5%, the highest since early 2008.
India's inflation rate rose in December to 8.43%, driven by rising food and fuel prices.
The increase follows rises in South Korea and Thailand.
Governor Duvvuri Subbarao said inflation in India remained at "elevated levels" requiring steps to lower "inflationary expectations".
