Indian government bonds moved sideways early on Monday, as caution over a fragile U.S.-Iran truce offset relief from oil's renewed slide below $80 a barrel. Brent crude futures fell 1.9% in Asian trade to $79.04 per barrel after Iran secured waivers for oil and petrochemical exports under the interim U.S.-Iran deal, ‌easing concerns over global ⁠supply ⁠shortages. Prices are now near pre-war levels, offering relief to oil-importing economies such as India.India bonds walk tightrope on steady oil, shaky US-Iran truceIndian government bonds traded cautiously early Monday, as concerns over U.S.-Iran tensions tempered relief from falling oil prices. While oil's dip below $80 a barrel eases import costs, traders remain wary of El Nino's impact on inflation and global yield risks. Markets are also awaiting a key decision on India's inclusion in a major global bond index, which could boost foreign investment. The first round of talks in Switzerland ended on Monday with an agreement to continue negotiations, despite lingering tensions between the two sides. The yield on the benchmark 6.94% 2036 note hovered little changed at 6.8533% as of 10:50 a.m. IST, versus Friday's close. The 10-year yield has eased for four ⁠straight weeks, paring ‌nearly 20 basis points, tracking the slide in oil prices. Traders said Indian debt markets still face rate risks from El Nino's ⁠potential impact on inflation and growth and elevated global yields after a hawkish U.S. Federal Reserve commentary. "Markets are closely watching how El Nino shapes the inflation-growth outlook and, in turn, the interest-rate trajectory," a private-bank trader said. El Nino conditions are forecast to weaken India's monsoon rains this year to their lowest in 11 years. Separately, traders are also waiting for Bloomberg Index Services' decision on whether to include ‌India in its flagship bond index. Inclusion in Bloomberg Global Aggregate Index will add to India's recent efforts to increase foreign inflows into Indian debt and equities. Foreign investors have ⁠stepped up bond purchases since the RBI's June 5 measures to boost inflows and New Delhi's tax cuts, net buying 213.5 billion rupees ($2.26 billion) so far this month. Inflows have already hit a 15-month high, with traders expecting more buying before month-end.RATESIndia's overnight index swap (OIS) rates saw muted early-Monday interest as caution prevailed. The one-year swap rate had not traded yet.The two-year rate fell 1.25 bps to 6.055%. The five-year rate fell 1 basis point to 6.3375%.