India should use Trump’s playbook on Trump for a fair trade deal

In my previous article, I explored several strategies from The Art of the Deal to negotiate with US President Donald Trump. This op-ed draws further insights for an analysis of India’s response to his moves on trade and geopolitics in the region.

Flattery, family, finance: These seem to play a major role in Trump’s dealmaking. He appears keen on deals that boost his ego, his family’s standing and his finances. 

This has been exploited by many countries. 

In his first term, Japan’s prime minister Shinzo Abe got his country a stronger hand during trade talks with the US by involving Ivanka Trump in official meetings. More recently, Qatar, the UAE and Saudi Arabia have been able to acquire much traction in the White House by lavishing him with praise and gifts. Vietnam has announced a $1.5 billion project with the Trump Organization in an apparent bid to curry favour. Even Pakistan seems to be enjoying a fair wind in his second presidency, thanks to crypto deals with the Trump family-owned World Liberty Financial and the sycophancy displayed by its newly appointed field marshal.

Also Read: Open-book test: The art of dealing with Trump the deal-maker

“I never get too attached to one deal or one approach. For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first,” wrote Trump in his famous book. 

He is ruthlessly transactional and treats each deal as a contest to be won with little regard for the past or future trajectory of the relationship with the other party. He seems to have little time for relations based on shared values, trust or geo-economic interests. This is apparent in the way many heads of state, including the leaders of Ukraine and South Africa, have been ambushed in the White House during interactions with the media. 

Trump also narrowly focuses on immediate economic gains from each deal, even if it is at the cost of geopolitical leverage. This was seen in his covetous approach to Greenland, Gaza and Ukraine. 

It would be an understatement to say that Indian observers, especially those on the right, have been disappointed with the trajectory of India-US relations under Trump. While many expected Trump to promote India as an alternative to China for supply chains, he has called India a “tariff king,” trained his guns on Apple production lines here and pushed for an extractive trade deal targeting 

India’s politically sensitive agriculture and dairy sectors, while raising barriers for our automobiles and metals. Geopolitically, instead of turning the screws on Pakistan for terror sponsorship, Trump has offered to do a trade deal with it and sought to appropriate credit for a post-Operation Sindoor ceasefire between India and Pakistan despite Indian protests.

Also Read: Trump’s tariffs: Turfed out but raring to return

The fundamental error that India seems to have made in dealing with Trump has been in trying to drive engagement on the basis of shared values and long-term geo-strategic and economic goals. While Trump’s personal relationship with Prime Minister Narendra Modi is a potent asset on its own, it is unlikely to sway major concessions our way, given the president’s transaction orientation. 

Another challenge for India will be to fend off an extractive trade deal without damaging the long-term trajectory of India-US relations. India’s position is delicate. Unlike China and Japan, India does not have significant economic leverage that can be used to obtain better terms. 

In such circumstances, India should exercise patience and show a willingness to walk away from a bad deal. This is critical because the Trump presidency will last for only four years, but a bad deal will haunt India for a long time. Such resistance will also signal strength, critical to earning Trump’s respect.

Also Read: Trade agreements struck earlier have taught India how to raise its game

Second, India should take a maximalist position on trade gains from a potential deal with the US in response to Trump’s pressure, instead of trying to absorb or deflect it. India could propose a deal where both countries have zero tariffs on all goods—to test America’s depth and commitment to mutual trade.

Above all, India needs to harness a combination of strategies based on Trump’s need for publicity and weakness for flattery, and match his transactional methods not just by showing a readiness to walk away from an unfavourable deal, but also hedging its geopolitical bets. 

This will have to be complemented with a drive to acquire economic leverage. In the short run, India could use its status as the world’s largest high-growth tech market open to US Big Tech. In the medium term, like China, India will have to woo America Inc and Wall Street and convert them into champions of the Indian economy. This will require hard economic reforms that attract foreign direct investment, especially in the manufacturing sector, from across the world. US corporate interests must get enmeshed with India’s economic emergence.

Also Read: Mint Quick Edit | Vietnam’s raw trade deal with the US isn’t good news

Trump’s high-stakes dealmaking on trade is a wake-up call for risk-averse Indian policy makers who have so far placed their faith in India’s growth story and macro stability. This faith is likely to be severely tested in the coming years. This is also an opportunity for them to fundamentally reshape the Indian economy and make it globally competitive. As Donald Trump is fond of saying, “If you are going to be thinking anyway, you might as well think BIG.” 

The author is a director at Arrjavv who researches and writes on behavioural finance and economics. Her X handle is @DivaJain2