A shopkeeper waits for customers at a spice market in Mumbai on April 28, 2008. India's central bank faces a tough dilemma as it decides whether to ramp up its inflation fight amid warnings that too harsh credit conditions could damage an already slowing economy. But while the country's economic engine is losing steam, inflation holds centre stage after more than doubling in four months to hit 7.33 percent -- a three-year peak. Overly aggressive monetary tightening by central bankers at their annual policy meeting could tip Asia's third-largest economy into a longer-term downturn after its rip-roaring growth, economists say. Getty Images logo Getty Images 21 months ago

A shopkeeper waits for customers at a spice market in Mumbai on April 28, 2008. India's central bank faces a tough dilemma as it decides whether to ramp up its inflation fight amid warnings that too harsh credit conditions could damage an already slowing economy. But while the country's economic engine is losing steam, inflation holds centre stage after more than doubling in four months to hit 7.33 percent -- a three-year peak. Overly aggressive monetary tightening by central bankers at their annual policy meeting could tip Asia's third-largest economy into a longer-term downturn after its rip-roaring growth, economists say.

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