MUMBAI: Indian government bonds traded in a tight range in early deals on Tuesday as investors held back from buying at higher prices ahead of a heavy slate of state borrowing, while softer US Treasury yields offered some support. The benchmark 6.48% 2035 bond yield was at 6.7021% as of 10:00 a.m. IST, after easing 2 basis points to 6.6970% in previous session. Bond yields move inversely to prices. “Broader direction will hinge on how smoothly Tuesday’s state debt supply clears; a strong auction could pull yields lower after the cutoffs, but any sign of indigestion can quickly push yields higher,” the trader said. Indian states’ plan to raise 445.50 billion rupees ($4.9 billion) broadly matches the scheduled calendar. However, it marks the highest weekly state borrowing in the financial year ending March 31, keeping traders wary of near-term supply pressure. The late-year surge in issuance continued to push yields higher, as dealers factored in the supply overhang despite potential intervention from the Reserve Bank of India. The central bank has provided aggressive support through the year, including record bond purchases that help absorb part of the market’s supply. On Friday, the market turns to the federal government’s sale of the 10-year benchmark 2035 bond worth 320 billion rupees, a test of demand that is likely to set the tone for yields through the end of the fiscal year. Globally, focus continues to remains on the moves in US yields and crude prices, after the recent spike citing US-Iran tensions. “For India, this raises the prospect of renewed input cost pressures, stickier inflation, and narrower policy space,” said Rajeev Sharan, head – criteria, model development & research, Brickwork Ratings.