Government bond yields rose in early trade on Tuesday as the Reserve Bank of India's macroeconomic report released post-market hours on Monday was perceived to be hawkish, cementing rate hike bets at the central bank's policy review later in the day.

The RBI said on Monday it expects inflation to remain near current elevated levels for the remainder of the fiscal year that ends in March, with analysts forecasting it to raise its policy interest rate for the second consecutive review due at 1100 on Tuesday.

The benchmark 10-year bond yield was at 8.70 percent at 9:05 a.m., up 4 basis points from its previous close.