India’s trade deficit widened to a 10-month high of $29.7 billion in August as imports hit a record high of $64.4 billion on doubling of gold inflows, and exports contracted for the second month in a row to $34.7 billion due to softening of oil prices and muted global demand.

Merchandise exports contracted 9.3 per cent to $34.7 billion in August.

Other factors that affected merchandise exports included a huge slowdown in China, falling petroleum prices, recession in advanced economies and transportation- and logistics-related challenges.

 Imports grew 3 per cent on-year, gold imports touched $10 billion in August due to factors such as stocking ahead of the festive season, falling global prices, as well as due to the yellow metal’s import duty cut from 15 per cent to 6 per cent in July.