The weekly wholesale price index was up 4.80 percent for the week ended June 2, a slight decline from 4.85 percent last week, the country's Central Statistical Organisation said.

The price decline comes after a higher than expected 13.6 percent gain in industrial output for April, the first growth-related data of the new financial year, was reported on Tuesday.

That has brought a mixed picture for investors on the possibility of a central bank rate hike at its next review in July.

Prices are just above a central bank inflation target of 4.0 to 4.5 percent for the current year to March 2008, but now well below a two-year high of 6.69 percent hit in January.

But analysts have speculated that continued strong growth may prompt it to continue a monetary tightening cycle that began in late 2004 to tame prices further.

Wholesale prices are more closely watched than consumer prices in India which are published monthly for urban consumers, farmers and industrial workers.