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India's monthly trade deficit may moderate further in the coming months, Acuite Ratings and Research Ltd said on Monday.

In a research report on India's trade deficit for the month of September 2022, it said that the monthly trade deficit may moderate further in the coming months as impact of recent correction in commodity prices trickles down and global supply chain pressures ease.

India's merchandise trade deficit moderated to $25.7 billion in September 2022 from its record high level of $28 billion in August 2022.

The moderation is owing to the sequential expansion in exports, while imports registered a mild contraction.

According to Acuite Ratings, there exists increased risks to exports due to the global slowdown and relatively healthy demand for imports would however continue to keep the deficit pressure elevated.

The credit rating agency maintains the its forecast of FY23 current account deficit at $130 billion, while adding that there is a scope for downside risk given the recent softness in commodity prices and inclination of the government to rollback administrative restrictions on exports.