By 11:10 a.m. (0540 GMT), the benchmark 10-year bond yield was at 8.53 percent, down 6 basis points (bps)from its close on Wednesday, after trading in an 8.52-8.58 percent range so far in the session.
Total volumes on the central bank's electronic trading platform were at a moderate 62.05 billion rupees.
"Global cues are positive for bonds today. If the central bank continues to do open market operations as suggested by Gokarn's comments, that too is positive," said Debendra Dash, a fixed-income dealer with Development Credit Bank.
Subir Gokarn, a deputy governor at the Reserve Bank of India (RBI) said on Wednesday the cash reserve ratio (CRR) is not just a liquidity tool but a monetary policy signal, amid market speculation that it might lower the ratio in order to ease tight liquidity in the banking system.
"Whether using an instrument that is part of monetary toolkit to address liquidity issue is certainly a debate which we have to engage in," Gokarn had said.
The cash reserve ratio, currently at 6 percent, is the proportion of deposits that banks need to set aside with the central bank as cash.
"The fact that the RBI is concerned about liquidity and is even considering or discussing the CRR tool is positive for bonds," Dash said.
The RBI, which will meet on Dec. 16 to review monetary policy, has been resorting to bond buybacks through open market operations in a bid to ease cash pressures and has announced three buybacks of 100 billion rupees ($2 billion) each so far.
"People have stock of the papers which are part of today's buyback and they want to sell it to the RBI at higher prices, hence trying to ensure the market continues to rally," the head of fixed income desk at a foreign bank said.
Trader focus will be on the results of the buyback, due after 0900 GMT, for directional cues.
US Treasuries prices rose on Wednesday as nervousness that euro zone leaders and the European Central Bank will disappoint investors in meetings on Thursday and Friday added a safety bid for the safe-haven debt.
Traders said a report in The Times of India that India's October industrial production likely shrank 7 percent, also aided sentiment for bonds.
The benchmark five-year swap rate was down 8 bps at 7.07 percent, while the one-year rate was 5 bps lower at 7.85 percent.