India's trade deficit stood at $26.5 billion in August, compared to $27.35 billion in the preceding month, the Ministry of Commerce said in a press briefing on Monday.The country's merchandise exports have edged up by 6.7% to $35.1 billion, while merchandise imports fell by 10.1% to $61.6 billion. On a sequential basis, while exports fell 5.7%, imports fell by 4.6%. To be sure, US President Donald Trump announced additional tariffs on India in early August, with the imposition of these tariffs starting Aug. 27. This took the cumulative levies on Indian exports to 50%."Interestingly, the growth in India’s exports to the US slowed to a nine-month low of 7.2% from nearly 25% in the first seven months of 2025, as the 25% penalties over and above the 25% reciprocal tariffs came into effect towards the end of the month," said Aditi Nayar, chief economist at ICRA Ltd."The penalty is likely to drive down exports to the US materially in Sept. 2025, which should lead to a sharp dip in overall exports, while also pushing up the trade deficit in the month," she added.Special Secretary Rajesh Agrawal said that the team from the US, including the chief negotiator are set to land in India for trade talks tonight, with the talks expected to resume on Tuesday.Despite global trade policy uncertainties, India’s exporters have done "extremely well", Commerce Secretary Sunil Barthwal told reporters. Government policies have played out well, he said, adding that India’s exports are quite diversified now, with the government and exporters working on further diversification.The focus is also on reducing dependency on certain geographies to avoid supply chain disruptions, he indicated. To be sure, the US remained India's top export destination, with merchandise exports rising to $40.4 billion between April-August this year, compared to $34.2 billion in the corresponding period last year. Tentative data for services showed a rise in both exports and imports. While services exports rose by 12.2% to $34.1 billion, imports rose by 6% to $17.5 billion. On an aggregate basis, exports rose by 9.3%, while imports fell by 7%.India-US Trade Talks Set To Resume On Tuesday, Days After Modi-Trump Thaw. Read more on Economy & Finance by NDTV Profit.