The Whole Sale Price Index (WPI) for the month of December was at 7.47 per cent versus 9.11 per cent in November.
Food inflation stayed in the negative for the second week running despite a slight uptick in prices because of the high statistical base of the last year.
A sharp drop in inflation will allow the Reserve Bank of India to start monetary easing. Inflation in food articles was -2.9% for the week ended December 31, data on Thursday showed. It stood at -3.36% during the previous week and 19.1% in the corresponding week last year.