Prominent, but not powerful.

India must stay neutral if an economic war breaks out between the US and China, wrote SA Aiyer. This is after Donald Trump announced tariffs of 25% on steel and 10% on aluminium imports into the US. China was critical of the US decision but has not retaliated so far. Maybe because metals account for only 5.1% of US imports from China, while electronics and machinery made up 48%. Furniture and toys account for 16.5% of imports from China, while textiles and clothes make up 8.6%. The European Union's response was more muscular, threatening tariffs on US exports to Europe. To that Trump threatened higher tariffs on European cars. Europe imposes a tax of 10% on US cars while the US taxes European cars at only 2.5%. The fear is that tit-for-tat tariffs may lead to a trade war. Trump tweeted that "trade wars are good, and easy to win". India enjoys a trade surplus of $30 billion with the US. Our trade with Europe is roughly balanced, with Europe having a slight edge in goods while India has an equal edge in services. India had a trade deficit with China of $52 billion. It makes no sense for India to take sides in this fight between heavyweights. "If, however, an anti-US coalition gathers force, especially in multilateral forums like the WTO, India could unobtrusively join that crowd, making sure it does not stand out," wrote Aiyar. Is it possible to take a contrary stance and remain unobserved? India is too big for that. Last year India voted against the US decision to recognize Jerusalem as the capital of Israel at the UN General Assembly. Although we were one of 128 countries who voted against the US, Israel protested to our government. The problem is that although we are big enough to be unobtrusive we are not big enough to throw our weight around, like China does. India has already raised customs duty across the board and increased cess to 10% from 3%, in next year's budget. Then we stopped providing data to foreign exchanges to stop derivatives trading outside our borders. Why we need to protect our businesses and markets from foreign competition when our economy is booming at 7.2% is a mystery. The global investment index provider, MSCI immediately condemned our decision and warned of reduced weightage for our markets, while looking to increase weightage of China whose markets are controlled by the government, inviting scathing criticism by N Shah. Our exports have been declining while imports have increased, leading to widening trade deficit. We are therefore in the unique position of being weak, but unable to hide. We should never take sides.