The yield on the 10-year benchmark bond was up 4 basis points at 8.34 percent after moving in a 8.32 to 8.34 percent band.
"Globally, there is a risk-on sentiment which is helping equity markets, so bonds are seeing some sell-off today," said Dinesh Ahuja, a fund manager at SBI Funds Management in Mumbai.
The MSCI index of Asian stocks ex-Japan was up 2.3 percent, while India's main share index rose 2.5 percent.
Volume in the bonds market was relatively lower, indicating traders were cautious.
"Oil is only marginally lower. We have the GDP data tomorrow which will be crucial for direction," Ahuja said.
Total volume on the central bank's electronic trading platform was 23.65 billion rupees ($515 million), compared with normal 30 billion to 40 billion rupees dealt in the first hour and half of trade.
The Indian economy probably grew an annual 7.6 percent in the quarter through June, slowing from the previous quarter's 7.8 percent growth, the median forecast from a poll of 28 economists showed.
Traders said a rise in US yields in Asian trade also weighed.
US 10-year Treasury prices dipped in Asian trading on Monday as equities rose after Fed Chairman Ben Bernanke left the door open for further easing.
Brent crude fell below $111 on Monday as oil refiners and terminals along the US east coast weathered the worst of a tropical storm, easing fears of fuel supply disruptions in the world's top oil consumer.
India will sell 110 billion rupees ($2.4 billion) of government bonds on Sept. 2, the central bank said in a release on Friday.
The benchmark five-year overnight indexed swap rate was up 5 basis points at 6.99 percent while the one-year rate was up 9 basis points at 7.81 percent.
The front-end has been rising sharply than the long-end as expectations for a rate pause at the central bank's next policy review on Sept. 16 are getting unwound after a hawkish annual policy statement, dealers said.
The central bank warned on Thursday against accepting high inflation as the "new normal," adding that the outlook for the country's industrial sector remained uncertain amid high input costs and weak global conditions.
Copyright Reuters, 2011