India has cut interest rates by more than expected, and for the fourth time this year.

The Reserve Bank of India (RBI) reduced interest rates from 7.25% to 6.75%, below the expected 7% mark. Interest rates have already been cut by 0.75 percentage points at three separate intervals this year.

Falling inflation has heaped pressure onto the RBI to boost economic growth. Inflation fell to the all time low of 3.6% in August as a result of falling commodity prices.

"In India, a tentative economic recovery is underway, but is still far from robust," RBI governor Raghuram Rajan said in a statement.

"Investment is likely to respond more strongly (and boost domestic demand) if there is more certainty about the extent of monetary stimulus in the pipeline."