India’s trade deficit is expected to improve in August to about $10.3 billion from $11.5 billion in July, largely on moderation in export as well as import growth, says a Morgan Stanley report.

According to the global financial services major, the moderation, on a year-on-year basis, is likely owing to higher oil prices and unfavourable base effects. “We estimate a moderation of export growth to 3.4 per cent year-on-year in August from 3.9 per cent in July and imports of 11.3 per cent in August from 15.4 per cent in July,” Morgan Stanley said in a research note.

According to data, India’s trade deficit stood at $11.44 billion in July, from $7.76 billion in the year ago period.