The US has been running a trade deficit with India for several years. Trade surplus means that we export more to the US than we import from the country. Increasingly protectionist measures by the US, however, threaten to derail the global economic growth engine. India’s exports account for a hefty 15 per cent of the US’ aggregate trade with the world.

Gems and diamonds are India’s biggest goods exports to the US, followed by pharmaceuticals, textiles, fish and petroleum products. As of now, these exports are not on the radar of the US, but there is a risk of retaliatory tariffs on these goods.

An all-out trade war will prove detrimental to global markets. Global economic growth hinges on the free movement of goods. The US has come down heavily on higher import duty on US-made Harley Davidson motorbikes. It previously threatened to slap retaliatory taxes on motorcycles coming into the US from India.

While India responded by slashing customs duty on imported high-end motorcycles to 75 per cent from the earlier 100 per cent, and eventually cut it down to 50 per cent, the US was left unimpressed and made it clear that the cuts were not enough.