In August, India’s merchandise trade deficit has grown substantially, reaching USD 24 billion. This widening gap between the value of imports and exports indicates a significant challenge to the country’s trade balance. Several factors contribute to this deficit, including increased imports of essential commodities, surging global commodity prices, and supply chain disruptions caused by the ongoing COVID-19 pandemic. The expanding trade deficit raises several economic concerns, including potential pressure on the Indian rupee’s exchange rate and inflationary pressures due to higher import costs, which could affect consumers. To address this situation and enhance economic stability, policymakers may need to implement measures to boost exports, stimulate domestic production, and diversify trade partners. These actions are essential to mitigate the impact of the trade deficit and foster sustainable economic growth in India.