According to the latest data available, India's benchmark 10-year bond yield increased just 1 basis point higher at 7.85 per cent.

The rise in bond yield was recorded following an increase in crude oil due to higher imports to China. Traders are waiting for factory output data on Tuesday and the inflation data on Thursday to determine next steps in the Indian market.

The bonds market is likely to remain stable as the government has said that it is not planning to borrow more this financial year. The government is looking to maintain a 5.3 per cent deficit for the current financial year.

India's union Finance Ministry has said that it expects a growth of 5.5 per cent for the Gross Domestic Product (GDP) during the current fiscal year, 2013. The prediction from the finance ministry comes after the Central Statistics Office (CSO) said that it expects the Indian economy to grow at 5 per cent, which is its lowest level in decade.

The slower growth rate in the Indian economy is attributed to poor performance by manufacturing, agriculture and services sectors. The Finance Ministry has said that the estimate by the CSO is likely to be revised and will be more aligned with the government's projection of a growth rate of 5.5 per cent for the current financial year.