Indian government bond yields ended little changed on Monday after falling during the day on expected inflows as domestic bonds are set to be included in JPMorgan's emerging market debt index later this week.

India's benchmark 10-year yield ended at 6.9741%, following its previous close of 6.9723%. The yield touched an intra-day low of 6.9532%.

"Today's upward movement in bond prices during the day seemed like a last leg of the rally before the actual index-led inflows start coming in later this week," said Alok Sharma, associate vice president of treasury at ICBC.

"While bond prices have factored in the inflows, we could see further fall in yields if US Treasury yields does not play spoilsport."

Domestic bonds will be included in the index on June 28.

Foreign banks have stepped up purchases of bonds last week ahead of the inclusion and is expected to continue this week as well, traders said.

Inflows into domestic bonds under the Fully Accessible Route crossed the $10 billion mark last week since the inclusion was announced in September.

Meanwhile, U.S. Treasury yields were largely unchanged on Friday after a strong business activity report indicated that the Federal Reserve has more reason to hold off interest rate cuts.

Fed funds futures now suggest the probability of a U.S. rate cut in September is 66%, a tad more than before the report was released on Friday, with traders pricing in one to two cuts of 25 basis points (bps) each this year.

Back in India, the central bank's rate-setting panel has diverged further in its views on the need for high interest rates to tame inflation, according to minutes from the June policy meeting.

India's economy needs an interest rate cut to sustain high growth, two external members of the central bank's rate panel said, arguing that food price shocks so far have not added to broader inflationary pressures.

(Reporting by Bhakti Tambe; Editing by Nivedita Bhattacharjee)