Retail food inflation was at 3.26% compared to 4.7% in December 2017.
Meanwhile, the Index of Industrial Production (IIP) growth in January 2018 jumped to 7.5% against the Bloomberg estimate of 6.4% and 7.1% in December 2017.
According to official data released on Monday, consumer price index (CPI) based inflation eased to a four-month low of 4.44 per cent in February from 5.07 per cent in January.
Production in the machine industry grew the most by 12.9 percent annually in January, followed by chemical industry with 9.0 percent spike. Within the food items, the inflation fell for vegetables to 17.57%, fruits 4.80%, meat and fish 3.31%, sugar and confectionery (-) 0.26% and cereals and products 2.10%.
The Reserve Bank of India (RBI), which takes into consideration the inflation indicator for deriving it's position on India's monetary policy stance, had increased the CPI target for Q4FY18.
The IIP growth in January this year was mainly on account of uptick in manufacturing sector, which constitutes of 77.63 per cent of the index. However, growth in the mining sector was muted in January 2018. "Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in global crude oil prices".
During January, 16 out of 23 industry groups in the manufacturing sector showed positive growth.
"When it comes to consumer inflation, 4.4% in February may be lower than January, the undercurrent remains biased on the upside, making RBI disinclined towards any rate cut, though the industry would like it to happen", it said in a statement.
Capital goods, a barometer of investments, showed a sharp increase in output by 14.6 per cent in January 2018 against a decline of 0.6 per cent year ago.