The new governor of the Reserve Bank of India has raised a key interest rate by a quarter of a percentage point in an attempt to reduce inflation.
The rate at which the central bank lends to commercial banks was raised from 7.25% to 7.50%.
The BBC reports the cash reserve ratio - the percentage of deposits that banks must keep in cash - was kept unchanged.
Earlier this week, the rate of inflation hit an annual rate of 6.1%, which was a six-month high.
"Bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately," said RBI president Raghuram Rajan on Friday.
Mr Rajan over as the head of the bank earlier this month.