India's benchmark 10-year bond yield fell as much as 11 basis points to 6.42 per cent.

Indian bond yields dropped sharply on Monday after the finance minister said the government won't change its plan to issue sovereign bonds and that she hopes the Reserve Bank of India makes more rate cuts.

"I'll honestly wish (for a) rate cut ... and yes, a significant rate cut would do a lot of good for the country," Nirmala Sitharaman told the Economic Times in an interview published on Monday.

"I am conscious that the RBI has taken a very accommodative posture and done nearly...75 basis points (rate cuts). We will now have to look at that route with a lot more hope. The industry also feels there is space for it," she added.

India's benchmark 10-year bond yield fell as much as 11 basis points to 6.42 per cent on Ms Sitharaman's comments.

Bond yields had risen sharply last week on news reports that the Prime Minister's office (PMO) was reassessing the idea of issuing foreign currency overseas sovereign bonds.

The PMO asked the finance ministry to seek wider consultation from stakeholders before proceeding with any plans, two sources with knowledge of the development told Reuters on Thursday.

The Economic times quoted Sitharaman as saying "I am not doing any review. I have not been asked by anybody to do a review."

Growth in Asia's third-largest economy is languishing at more than four-year lows but analysts remain split on whether larger rate cuts or more fiscal stimulus are the way to help boost it.

The RBI should wait for previous cuts to take effect and to see the monsoon's impact on crop prices "before considering for any rate change," said Arun Singh, chief economist at Dun and Bradstreet India.

In recent interviews, RBI Governor Shaktikanta Das has highlighted the lack of transmission and said future cuts depend on data points, particularly inflation.

Ahead of an August 7 monetary policy committee decision, markets are pricing in another quarter-point cut in the repo rate.