New Delhi, Aug. 4 -- Indian government bond yields traded flat on Tuesday, August 4, as investors remained on the sidelines ahead of the Reserve Bank of India's (RBI) monetary policy decision, while a large state bond auction kept market participants cautious.

The benchmark 6.94% 2036 government bond yield was little changed at 6.8346%. According to a Reuters report, Indian states are scheduled to raise Rs.268.5 billion through bond sales later in the day, with the auction expected to provide cues on investor appetite for debt.

The RBI's Monetary Policy Committee (MPC), which began its three-day meeting on August 3, is set to announce its policy decision on August 5. Economists and market experts widely expect the central bank to keep t...