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 India's merchandise trade deficit declined by around 3 per cent to $24.16 billion in August from $24.86 billion in the same month last year, Commerce Secretary Sunil Barthwal said on Friday.

A lower trade deficit is good news as it leads to a strengthening of the rupee and bolsters the macroeconomic fundamentals of the economy.  

The official trade figures compiled by the Commerce Ministry show that merchandise exports stood at $34.48 billion in August up from $32.25 billion in July. However, imports during August were also higher at $58.64 billion compared to $52.92 billion in the previous month.

However, exports fell when compared year-on-year as they had touched the $37.02 billion mark in August last year. Barthwal said that lower prices of petroleum goods were responsible for the dip in overall exports.

The slowdown in global markets has also been a factor as exports to the US, India's largest trade partner, have fallen to $31.55 billion in August from $35.15 billion in the same month last year.