India's currency appreciation is unlikely to serve as an effective anti-inflationary tool due to the country's limited dependence on food items and basic goods imports, which are pushing up the headline inflation, a top government official said.

"Large part of inflation is taking place in food and basic goods (industrial raw materials). If it (rupee appreciation) leads to greater imports of those, then yes. But typically, our import dependence on these items have been small," Chief Statistician of India T.C.A Anant told Reuters on Monday.

India's wholesale price index rose 8.62 percent in September compared with 8.5 percent in August, while food inflation accelerated to 15.71 percent raising fears that the central bank may raise policy rates for the sixth time this year in November.

Anant said the rising rupee posed a policy dilemma for the central bank.

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"It (rupee appreciation) requires the bank to manage policy carefully because if it seeks to neutralise the inflow by complete sterilisation, then you will increase the pressure on price level and if you do incomplete sterilisation, then it maintains the pressure on the rupee."

Analysts said dollar sales by the central bank in the foreign exchange market to check the rupee's appreciation could lead to excess rupee liquidity, which the Reserve Bank of India would then absorb through issuance of bonds.

The partially convertible rupee has so far appreciated by 5.3 percent this year on record $23.2 billion foreign fund inflows into shares, and has partly helped to rein in headline inflation through cheaper imports.

Anant also said the headline inflation was likely to come down significantly with food inflation softening with the arrival of new harvest from mid-November.