India's retail inflation slowed to 4.31% in January from 5.22% in December, government data released on Wednesday showed.

This could clear the way for another rate cut by the Reserve Bank of India, which slashed rates from 6.5% to 6.25% after its monetary policy meeting on Feb. 7.

Retail inflation in India eased to a five-month low of 4.3% in January due to moderating vegetable prices, while industrial output growth slowed to 3.2% in December, largely due to sluggish performance in the manufacturing sector.