The retail inflation had stood at 10.56% in December, 9.90% in November and 9.75% in October, 2012.
The vegetables basket in January recorded the highest inflation of 26.11% among all the constituents that make the Consumer Price Index (CPI), according to data released today.
Vegetables were followed by the oil and fats segment at 14.98%. Meat, fish and egg became 13.73% more expensive during the month.
While cereals and pulses became dearer by 14.90% and 12.76% respectively on an annual basis, sugar turned more expensive by 12.95%.
Clothing and footwear witnessed 11% increase in prices during the month.
In urban areas, retail inflation rose to 10.73% in January from 10.42% in the previous month. The CPI for rural population increased to 10.88% during the month from 10.74% in December.
The data for wholesale price index (WPI)-based inflation is expected on Thursday. The WPI figures for December stood at 7.24%, much higher than RBI's comfort level of 5-6%.
The Reserve Bank of India (RBI) in its monetary policy last month had slashed its key interest rates by 0.25% and released Rs 18,000 crore additional liquidity into the system to perk up growth through reduced cost of borrowing.
The RBI has forecast the March end WPI inflation at 6.8%.
Meanwhile, industrial output growth rate contracted by 0.6% in December, 2012 compared to a growth of 2.7% in same month a year ago.