India’s merchandise trade deficit widened to $29.7 billion in August from $23.6 billion in the previous month, data released by the ministry of commerce on September 17 shows.

While exports rose to $34.7 billion in August from $33.89 billion, imports increased to $62.6 billion from $57.5 billion in July.

The exports were lower than the previous year.

For the financial year 2024-25 (till August), exports at $178 billion were up 1.1 percent, while imports rose at a faster rate of 7.1 percent.

While export growth has been muted, electronic goods and electrical machinery exports have soared, with smartphone manufacturing picking up.

In August, smartphones overtook cereals as India’s eighth largest export item.

Economists contend that lower oil prices — the benchmark Brent crude hovering near a three-year low of $70 — could help contain current account deficit.

Current account deficit (CAD) reduced to 0.7 percent of the GDP in FY24, compared with 2 percent the previous year.

This year, CAD is expected to be higher at 1.4 percent, the International Monetary Fund has said.

The Reserve Bank of India will release CAD data for the first quarter of FY25 by the end of September.