The Wholesale Price Index, the most closely watched cost of living monitor, rose to 6.01 percent in May -- the highest figure since December and compared to 5.20 percent in April.
The jump, which was in line with market expectations, was driven by higher food and fuel prices, commerce ministry data showed.
The increase comes amid a rally in oil prices and forecasts for weaker monsoon rains that threaten to cut crop production and further drive up food prices.
Modi's right-wing government, which came to power a month ago after a landslide election victory, has pledged to revive the economy growing at under five percent.
The government has also made tackling inflation, which hits millions of India's poor through high costs of basic items, a priority.
The price of food across-the-board rose 2.3 percent in May from a year earlier, while fuel prices, including that of electricity, rose by 0.5 percent.
The government is expected to unveil the annual budget next month, with analysts calling for long-term reforms to return the economy to health.
"The uptick in fuel and food inflation in the month of May is not surprising," said Siddhartha Sanyal, chief India economist at Barclays.
"What we need to see is how the new government tackles food prices and agricultural policies," Sanyal said, referring to the monsoon and the budget."They seem (to be leaning) towards prudent long-term moves and fixing the economy at fundamental levels rather than going in for short-term steps like an economic stimulus."
The monsoon is expected to be below normal this year because of the threatening El Nino, which could lower crop production and undermine Modi's efforts to curb inflation and boost growth.
Oil is also trading higher globally due to the worsening crisis in Iraq. Higher energy costs could drive up power prices in India which imports most of its oil.