MUMBAI, June 11 (Reuters) - Indian government bond yields were nearly unchanged early Tuesday as market participants waited on the sidelines a day before key inflation data from India and the U.S., followed by the Federal Reserve's monetary policy decision.

India's benchmark 10-year yield was at 7.0210% as of 10:00 a.m. IST, following its previous close of 7.0331%.

"With cabinet formation already done, elections are now behind us and the focus has shifted to data and U.S. interest rate trajectory," a trader with a primary dealership said.

"Till then we may see yields in a narrow range."

India's consumer inflation likely snapped a four-month downward trend in May due to rapidly rising food costs, according to a Reuters poll of 50 economists that predicted the reading to have picked up to 4.89% from April's 4.83%.

The May data will be released after market hours on Wednesday. That will be followed by the U.S. retail inflation print, which a Reuters poll estimates to be flat against April.

The 10-year U.S. yield remained elevated at around 4.45% mark, ahead of the data and Fed decision, especially after strong nonfarm payrolls which could ease the pressure of rate cuts from the central bank.

Futures are indicating a 50% probability of a rate cut in the September meeting, down from 60% a week ago, according to the CME FedWatch tool.

Meanwhile, underlying sentiment supported after Prime Minister Narendra Modi's Bharatiya Janata Party retained key portfolios in the new coalition government, including the finance ministry.

Indian states continue to undershoot the schedule as seven states aim to raise 77.50 billion rupees ($928.25 million) via sale of bonds later in the day, lower than 122 billion rupees as per the calendar. ($1 = 83.4900 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)