MUMBAI, Feb 13 (Reuters) - Indian government bond yields may edge down slightly in the early session on Tuesday, as local inflation eased to a three-month low, while major focus would now remain on U.S. inflation data due later in the day.

India's benchmark 10-year yield is expected to fluctuate in the 7.06-7.11% range, following its previous close of 7.0946%.

"The inflation print is positive, but largely factored in and hence may not lead to any large-scale rally in bond prices, especially at a time when U.S. inflation reading is a much more important factor," the trader said.

India's retail inflation rate touched 5.10% in January, as prices of some food items increased at a slower pace. Economists estimated core inflation at 3.6%, down from 3.8% in December.

The annual retail inflation eased in January from 5.69% in December, and was in line with a 5.09% forecast by a Reuters poll of 44 economists.

"While headline retail inflation cooled in January, it has now spent 52 consecutive months above the Reserve Bank of India's (RBI) medium-term target of 4%," Soumya Kanti Ghosh, group chief economic adviser at State Bank of India, said.

"CPI inflation is expected to remain slightly above 5.0% in the remaining two months of this fiscal leading to an average inflation of 5.4% in FY24. Inflation is then expected to decline until July, but increase thereafter to reach a peak of 5.4% in September," Ghosh said.

Last week, the RBI left interest rates unchanged, signalling that cuts may be some time away as it reiterated its commitment to meet the medium-term 4% inflation target on a sustainable basis.

"The last mile of disinflation is always the most challenging and that has to be kept in mind," RBI Governor Shaktikanta Das said.

Meanwhile, the 10-year U.S. yield stayed elevated but did not exceed the critical 4.20% mark, before inflation reading, which will offer the next clues on when the Fed is likely to begin cutting interest rates. KEY INDICATORS: ** Brent crude futures 0.1% lower at $82.05 per barrel, after easing 0.2% in the previous session ** 10-year U.S. Treasury yield at 4.1773%, two-year yield at 4.4738% ** Nine states to raise 175 billion rupees ($2.11 billion) via sale of bonds ($1 = 82.9770 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Dhanya Ann Thoppil)