Traders said expectations of a rate cut on Jan. 24, when the RBI meets to review its monetary policy, was dissipating after Monday's inflation numbers as manufacturing inflation remained stubbornly high.

At 9:16 a.m. (0346 GMT), the 10-year benchmark bond yield was up 2 basis points on the day at 8.24 percent.

India will sell 40 billion rupees of 7.83 percent 2018 bond, 70 billion rupees of 8.79 percent 2021 bonds, and 30 billion rupees of 8.83 percent 2041 bonds.

On Monday, Finance Minister Pranab Mukherjee also expressed concern that manufacturing inflation has declined "only marginally".