India's consumer price index (CPI) in December rose to 7.35 percent, the worst since July 2014 as per the data released by the government late Monday.

"CPI inflation came in higher than our expectations at 7.35 percent vs. 5.54 percent last month, driven primarily by a sharp spike in food inflation and upward momentum in miscellaneous basket led by surge in telecom tariffs," said Anushri Bansal, analyst with ICICI Bank, the second largest Indian bank in terms of assets and market capitalization.

The inflation rate marks the third consecutive month in a row when the rate was above comfort zone of 4 percent stated by the country's central bank, destroying hopes of possible interest rate cut to stimulate growth.

"Food inflation might subside in the coming months, but the pressure on crude oil prices due to geopolitical tensions is an area of concern," said Deepthi Mary Mathew, an economist from domestic investment services company Geojit Financial Services.

She said the central bank will hold the rates in February, and would also keep a close watch on the fiscal deficit figures in the current scenario before resuming the rate cuts.

Indian economy slumped to over six-year low of 5 percent and 4.5 percent growth rate in the April-June quarter and July-September quarter of 2019, respectively despite the country's central bank reducing policy rate by 135 basis points to 5.15 percent during the year to boost growth.

However, the Central Bank kept rates unchanged in its last policy review meeting in December, citing concerns over inflation in the near term.

"RBI (central bank) may not hike the policy rates in the immediate future. It may not be able to cut the rates either. While the circumstances around likely fiscal slippages may have an adverse impact on interest rates, the inflation level would add to these worries in the immediate term," said Joseph Thomas, head of research in Emkay Wealth Management.