Indian government bonds closed lower on Tuesday, with the benchmark 6.94% 2036 issue seeing its yield rise by one basis point to 6.6958%.
The decline followed a volatile trading session dominated by profit-taking activity, which triggered the most significant intraday spike in yields for the day.
The move in Indian debt mirrors a broader retreat by foreign institutional investors from Indian financial markets.
Rising US Treasury yields are exacerbating existing valuation concerns, prompting a broad-based pullback that is affecting both equities and the domestic bond market.
This repricing reflects the sensitivity of emerging market assets to shifts in global risk-free rates.
The selling pressure in Indian bonds comes as US Treasury 6-month bill yields hit 2.4%, their highest level since January 2025.