Indian government bonds are likely to trade in a narrow range on ​Tuesday, as markets await details of the preliminary peace deal between ‌the U.S. and Iran and assess fresh debt ​supply from Indian states.

The yield on the ⁠benchmark 6.94% 2036 note is likely to move between 6.85% and 6.89%, according to a private bank trader. It closed at 6.8704% ‌on Monday, its lowest closing level since March 24.

Yields move inversely to bond prices.

"It was ‌just a matter of when the peace deal ‌coming ⁠through, and it will definitely add to the ⁠positive momentum that has built up since the central bank's policy decision," the trader said.

The benchmark Brent crude contract inched higher in Asian hours ​on concerns about the ‌lack of details in the peace agreement and the resumption of supply through the Strait of Hormuz.

On Monday, crude prices dropped nearly 5% to their lowest close since ‌March 4, after U.S. President Donald Trump ​said a memorandum of understanding was signed to end the war and reopen the strait, a ⁠key passage for one-fifth of the world's oil and liquefied natural gas supply.

India imports about 90% of its crude ‌oil requirementsand a sustained fall in prices could ease pressure on inflation, the rupee and the country's trade deficit.

Lower oil prices will also support the Reserve Bank of India's effortsto attract foreign inflows, helping ease pressure on India's import bill and aid the rupee.

Foreign investors have ‌injected over $1.75 billion into domestic bonds over the last seven sessions since ​the RBI announced measures to attract dollar inflowsearlier this month.

Meanwhile, Indian states will aim to ⁠raise 216 billion rupees ($2.28 billion) through bond sales later in the ⁠day.

RATES

India's overnight index swap rates may also see limited moves after recent declines.

On Monday, the one-year ‌swap rate dropped 4.25 bps to 5.9250% and the two-year rate fell 4.5 bps to 6.08%. The five-year ​rate settled at 6.3150%.

Published on June 16, 2026