India has increased its short-term interest rate for the third time in four months in a bid to curb inflation.
Fuel prices have been raised in India after a nine month freeze
The country's central bank raised the rate by 0.25% to 6%, amid fears that strong global oil prices threatened financial stability.
The Reserve Bank of India has also warned about rising house prices and the surge in credit growth, which it wants to see reined in.
The long-term interest rate remained unchanged at 6%.
India's economy grew at an annual rate of 9.3% in the three months to June, but critics say the effects are not filtering down to poorer people.
The government has been criticised for raising petrol and diesel prices, which are customarily heavily subsidised.