MUMBAI, May 21 (Reuters) - Indian government bond yields are expected to decline in early trade on Tuesday, after the government announced a reduction in the supply of shorter-dated Treasury bills for the next six weeks, while it aims to buyback notes maturing in less than six months.

The benchmark 10-year yield is likely to move in a 7.01%-7.06% range, following its previous close of 7.0465%.

The 7.18% 2033 bond yield is expected to trade between 7.05% and 7.10%, after ending at 7.0925%, a trader with a state-run bank said.

"The cut in Treasury bills was what the market was wanting, and we should see a better reaction in bonds than the buyback announcements, and this along with a change in securities for repurchase would strengthen the bulls," the trader said.

India will reduce the supply of T-bills by 600 billion rupees ($7.20 billion) till the end of June, and will sell 40 billion rupees of 91-day, 182-day and 364-day T-bills every week, down from 100 billion rupees, 50 billion rupees and 70 billion rupees scheduled earlier.

Before the announcement on Friday evening, Reuters reported that traders were expecting a cut in the government's short-term borrowing to reduce the liquidity deficit that has persisted over the last few weeks amid the ongoing general elections.

This comes after the government bought back bonds worth only 126 billion rupees, against a notified amount of 1 trillion rupees.

It aims to buy back securities worth up to 600 billion rupees later in the day, but the market anticipates a better response, as the government has come up with a new set of securities to be repurchased.

Meanwhile, the 10-year U.S. yield inched higher as Federal Reserve officials pointed to uncertainty over the central bank's ability to cut rates if inflation remains sticky, which also reduced the bets on the quantum of rate cuts in 2024.

The futures market is now expecting around 41 basis points of rate cuts in 2024, after fully pricing in two rate cuts on easing inflation, according to CME FedWatch tool. KEY INDICATORS: ** Brent crude futures were 0.4% lower at $83.35 per barrel, after easing 0.3% in the previous session ** Ten-year U.S. Treasury yield at 4.4472%, two-year yield at 4.8436% ** RBI to buyback bonds aggregating to 600 billion rupees via auction ** Five states to raise 52 billion rupees via sale of bonds ($1 = 83.3400 Indian rupees) (Reporting by Dharamraj Dhutia Editing by Eileen Soreng)