Indian government bonds turned lower after a flattish open on Thursday, as caution before heavy debt supply outweighed the impact from retreating oil prices.The yield on the benchmark 6.94% 2036 bond was at 6.8619% as of 10:30 a.m. IST after closing at 6.8488% on Tuesday. Indian fixed income ‌markets were ⁠shut on ⁠Wednesday.New Delhi is set to raise 340 billion rupees ($3.56 billion) through sale of the ​benchmark paper on Friday, which will take its outstanding to 1.80 trillion rupees.India bonds decline as debt supply caution overpowers oil movesIndian government bonds fell on Thursday, opening flat before succumbing to pressures from heavy debt supply despite declining oil prices. Policy meeting minutes hinted at possible interest rate hikes should inflation risks emerge more broadly. Meanwhile, Brent crude oil prices dropped for the fourth day in a row, and overnight indexed swap rates reflected a potential increase after a recent sharp decline."Concerns of how ​the auction will go are having a larger impact for now, as the sentiment has completely changed after the policy minutes," the trader said.Last week, minutes of the Reserve Bank of India's ⁠August monetary policy ‌showed policymakers were open to raising rates if inflation risks materialise and broaden.The next policy decision is due on October ⁠7, and the central bank will have only one inflation ​print before that. Retail inflation stood at 4.45% for ​July.Benchmark Brent crude oil prices eased for the fourth straight session to around $87.4 per barrel in Asian hours on Thursday, notching a nearly 7.5% decline in the period, on expectations that talks between Iran and Qatar may open the key Strait of Hormuz.The strait used to transit a fifth ‌of the global oil and natural gas shipments before the U.S.-Israeli war with Iran started on February 28. Since Iran worked ​to shut ​the waterway in response, ⁠oil flows have dropped to about one-quarter of their pre-war level, according to ship-tracking data.Easing oil prices would benefit large energy importers like India, as expensive ​oil risks fanning the country's inflation and straining government finances.RATESIndia's overnight indexed swap rates were biased for a rise after undergoing a plunge on Tuesday.The one-year swap rate was at 5.88%, while the two-year rate was at 6.07%; and the five-year rate was at 6.36%.