Lessons in dealmaking from the Modi-Trump meeting – CNBC TV18

Lessons in dealmaking from the Modi-Trump meeting – CNBC TV18

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“If it’s your job to eat a frog, it’s best to do it first thing in the morning. And if it’s your job to eat two frogs, it’s best to eat the biggest one first,” is a quote attributed to the renowned author Mark Twain. It essentially means one should complete the toughest task first. However, it may not be good advice for diplomats and dealmakers, as shown by both US President Donald Trump and Indian Prime Minister Narendra Modi today.

Despite the differences in leverage, styles, and goals, the two world leaders displayed diplomacy at its best. Trump was unusually graceful, particularly, at the joint press conference after the meeting in which he and Modi agreed on a whole host of issues.

What we saw today was the first lesson in dealmaking: focus first on what all sides can agree on, and not the differences.

The second lesson is the importance of appreciation. It softens the opponent and increases the odds of a compromise. (Reuters)

“Only one person in the world has the copyright over the word ‘deal’, and that is Donald Trump,” Modi said after the bilateral talks with the US President. In response, Trump described Modi as “a much tougher negotiator, and a much better negotiator,” than him.

Even though Trump started the day with provocations of reciprocal tariffs before the meeting with Modi, both leaders were clearly ready to look at areas where they could play as a team, rather than being adversaries.

Once the two decided they could do business together, the focus was more on the consensus than the quarrels.

Both India and the US are hawkish about China’s growing influence. The agreement to invest more time, money, and energy on the India-Middle East-Europe corridor would be a direction in which the two countries can move lockstep.

Read more: Trump and China can still spring a big surprise for global markets

Similarly, being partners in the exploration and supply of critical minerals like lithium is essential for both countries. While the US may have lead in the production of semiconductors and batteries, which require rare earth minerals, China still controls the world’s supply. It endangers the US’ lead and leverage and curbs India’s potential in areas critical to the economic future.

Both leaders want to end the war in Ukraine and bring down oil prices to contain inflation in their respective countries. They have a common interest in tempering the influence of countries like Saudi Arabia who have an outsized influence on global crude oil prices.

India can gain from buying more oil from the US as long as the prices are at least slightly cheaper than what OPEC, the lobby of oil-producing nations, has to offer. The move will also help the US reduce its trade deficit, which stood at over $45.7 billion in 2024, with India.

Since taking over as President for the second term, Trump has already blasted Saudi Arabia and OPEC for keeping oil prices too high, which, according to the US President, helps Russia continue with the war in Ukraine. PM Modi too emphasised India’s wish to end the war more than once.

America wants India to wean its reliance on Russian oil and weapons. Diversifying sources of supply has become the accepted wisdom in the post-pandemic era. So, India might choose to yield to Trump’s demand that New Delhi buys Lockheed Martin’s F35 fighter jets, if the US delivers on its promise to support India’s aspirations for progress in artificial intelligence and other spheres of technology including nuclear power.

It would help the US further reduce the trade deficit, and India would gain from more US investment.

The appeal of AI is no longer in the billions that big tech companies like Microsoft, Apple, Amazon, and Google can spend. It’s become clear since the advancement in Deepseek, China’s answer to OpenAI’s ChatGPT, that newer technologies and services have to be cost-effective. Trump, probably, realises that India, with its talent pool, may be a priceless ally in making technological leaps at affordable cost.

Deft diplomacy, or even conflict resolution, involves a lot more than measuring the advantage of one side over another. Dealmaking is an art. When you find yourself cross with a friend, it may help to remember the good old days just like Modi and Trump did today.

Flexing your muscles may work for a while but sticking to a ‘my way or the highway’ approach doesn’t yield consensus. Acknowledging the rival’s strengths increases the odds of agreement.

Focussing first on stuff that can be achieved together makes you friends with some disagreements. Focussing first on the differences will only widen the chasm with no agreements. In diplomacy, don’t eat the frog first!

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