NEW DELHI, Jan. 12 -- India's retail inflation rose to 1.3% in December from 0.7% in November, data released by the statistics ministry on Monday showed, as food deflation moderated and favourable base effects began to fade.

The December reading was the highest in three months, signalling a gradual exit from a period of unusually low inflation. Inflation has remained below the lower tolerance band of the Reserve Bank of India's (RBI) 2-6% target range for five of the past six months, but is now expected to move closer to the central bank's 4% target as base effects turn unfavourable.

The December print was below the consensus estimate of 1.6% in a Mint poll of economists, who had flagged a bottoming out of food prices and early signs of...