Indian government bonds rose on Tuesday as plunging crude prices and strong demand at a state debt auction eased concerns over fresh U.S. sanctions on Iran and the Reserve Bank of India's rate outlook. The benchmark 6.94% 2036 bond yield settled 2 basis points lower at 6.8488%, reversing Monday's rise. Bond yields move inversely to prices. Indian States raised 201 billion rupees through bond sales earlier in the day, with some issuers securing their tightest spreads over central government debt in months.