Indian government bonds rose early on Friday, tracking overnight gains in U.S. Treasuries and lower oil prices, while traders stayed cautious ahead of a large debt sale later in the day. Foreign buying continued to support the market, with overseas investors purchasing a net 15 billion rupees of bonds on ‌Thursday. Their purchases ⁠have ⁠reached nearly $4 billion since early June after recent policy measures boosted expectations of India's inclusion in Bloomberg's Global Aggregate Index.Longer-dated yields lower after data, on track for weekly declineLonger-dated U.S. Treasury yields declined on Friday after recent economic data. Markets largely priced out a Federal Reserve rate hike for this month. Import prices increased unexpectedly, while consumer and producer prices showed moderation. Geopolitical worries and hawkish Fed comments added to market uncertainty. Bond yields moved lower, suggesting a flight to safety amid rising oil prices. The benchmark 6.94% 2036 bond yield slipped 2 basis points to 6.7348% by 11:10 a.m. IST. It was still set to end the week higher and snap six straight weekly declines. Bond yields move inversely to prices. The yield has swung between 6.68% and ⁠6.77% this ‌week, with bulls taking control over the past two sessions. Brent crude fell more than 2% to about $76 a barrel from near $80. ⁠The 10-year U.S. Treasury yield closed about 3 basis points lower overnight, before edging up in Asian trading. Lower oil is a direct positive for India, the world's third-largest oil importer and consumer, as it eases pressure on inflation, the current account and the rupee. Falling Treasury yields also helps preserve the risk premium that Indian debt offers and foreign investors seek in emerging-market debt. "Foreign buying has kept ‌dips shallow, but the auction will decide whether traders add duration from here," a private-bank trader said. "The cutoffs and overseas demand at the sale will be the ⁠market's next cue." New Delhi will raise 320 billion rupees ($3.36 billion) through the sale of liquid five-year debt and a longer-duration 40-year bond.RATES India's overnight index swap rates fell sharply as softer oil and a stable rupee strengthened the case for a better inflation path and trimmed rate-hike expectations. The one-year OIS fell 3 bps to 5.78%, the two-year also dropped 3 bps to 5.93%, and the five-year eased 2 bps to 6.19%.