MUMBAI - Indian government bond yields are expected to be largely unchanged in early trade on Tuesday, as investors continue to await fresh triggers while keeping an eye on inflows as the notes are set to be included in a global index on Friday.

The benchmark 10-year yield is likely to move in a 6.95%-6.99% range, following its previous close of 6.9741%, a trader with a primary dealership said.

"Index inclusion is the central theme for this week and as soon as the market senses some chunky inflows, we could see a fresh low in benchmark bond yield today or later in the week," the trader said.

Inflows into bonds under the so-called fully accessible route, which will be included in JPMorgan's widely-tracked emerging market debt index on June 28, have risen to more than $10 billion since the inclusion was announced in September.

Investors tracking the index are bullish on India and had allocated 3.6% of holdings to the country's bonds as on end-May. Investors have pre-positioned for the index inclusion to some extent, Min Dai, head of Asia Macro strategy at Morgan Stanley, said in a note on Friday.

Foreign banks have also stepped up purchases of bonds, especially those of longer maturities, and the market is expecting more chunky flows by end of the week.

The Reserve Bank of India's rate panel has diverged further on need for high interest rates to tame inflation, with some fearing economic growth is being sacrificed, minutes of the June policy meeting showed.

The earliest the RBI can cut rates is October with greater clarity on food inflation risks as well as on Federal Reserve policy, IDFC First Bank said.

The 10-year U.S. Treasury yield continued to hover around the 4.25% mark as investors awaited economic and inflation data due this week to assess whether a recent weakening in economic activity will continue.

KEY INDICATORS: ** Brent crude futures were 0.1% lower at $85.95 per barrel, after rising 0.9% in the previous session ** Ten-year U.S. Treasury yield at 4.2341%, two-year yield at 4.7277% ** Nine states to raise 170.71 billion rupees ($2.04 billion) via sale of bonds ($1 = 83.4900 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)