07/06/2016 World Business Report

Sally has all the business and -- answers.

Modi and Obama are together again, this time in Washington with trade

So what will India's Prime Minister take home this time?

And the bets are off for a summer rate hike in the US,

but just how cautious is Janet Yellen, the most powerful

Also in the programme: What is the fate of India's

Will Raghuram Rajan keep the top job?

Our team in Mumbai is across that for us.

The leaders of the world's two biggest democracies will meet today

in Washington for a working lunch at the White House.

Business opportunities will be top of the agenda

when India's Narendra Modi and President Obama meet.

According to one estimate, some 30 US companies have invested

more than 15 billion dollars in India over the past 18 months.

And in the next year, 50 more are expected to invest

With me is Gervais Williams, managing director of Miton Group.

Good morning. Now, give us your take on how important this relationship

is and who is getting the most out of it? It is an important

relationship. India has lots of development opportunity. There is a

large population which is ready to do more work and the business sector

is not drawing good figures and growth at the moment, encouraging

inward investment, and if Modi can get more investment from the US, the

biggest investor of capital in the world, that will boost the

opportunity to grow the economy and deliver on the promises. What are

the hindrances? It is not easy for countries working -- companies

working and investing in India. It is still much less educated than the

average education in China even, for example, so there is a long way to

go, and a huge bureaucracy holds back business. They want to invest

but find bureaucracy holds it back. That puts them off after a while. It

is a big area to deal with. Some sectors have found it hard, like

retail, they have found it hard to set up shop in India, but I think

things are improving, are they not, in terms of the barriers that were

there some years ago. They are improving and the opportunities,

infrastructure is also going at the moment, for example the Indian rail

system, which was around 3000 kilometres, has only really added

around 4000 kilometres since that time, so we need more investment in

infrastructure. Now, for Narendra Modi this is one of several trips to

the US. Remember his first after becoming PM, it was like a rockstar

welcome in Madison Square, how is he going down having been in the job.

I'm? -- being in the top job for some time? The world has been

slowing. Not many economies are doing as well as India. It is

actually a leading light in opportunities going forward and that

is why the US are keen to engage on there. In terms of investment,

something you advise your clients on, many like the IMF and others at

the start of this year said India is one of the economies that will boom.

It is growing faster than China. Your thoughts on how exciting it is

as an opportunity? The opportunity ratio is improving. Some of the

ratios are coming through. At a time when economic slowdown has been seen

with poor US data coming through. We have seen slow growth, a recession,

really, in Japan at the moment, and so from that point of view in a

world context it is one of the brightest areas of growth going

forward. OK. Thank you very much indeed. He will return in five

minutes when we review the papers. Let's stay with India for a little

longer. The country's central

bank will meet today And it's a key time

for the Governor Raghuram Rajan as his current tenure comes

to an end in September. That's up to the Indian government

and it's not made a decision yet. Rajan has also remained silent

on this issue and this is making This report from Sameer Hashmi

contains flash photography. Every two months when India's

central bank meets in this building to decide on interest rates,

the markets are usually Similarly, this meeting has

been watched closely The big question on everybody's mind

is will the governor Raghuram Rajan continue

on the reserve bank of India post September when his term comes

to an end? There are have been a series

of events over the last couple of months which have

put a big question mark It started with a senior member

of Prime Minister Narendra Modi's party criticising Mr Rajan

for keeping interest rates high. Most saw it as a political attack

given Mr Rajan has had what many say an uneasy relationship

with the current regime. He has criticised certain economic

policies of the government, like the flagship manufacturing

programme, and has also often played down the euphoria around

India's economic growth. And what has added fuel

to the ongoing debate is the silence of the Prime Minister Narendra Modi

and whether he will give Mr Rajan When we hear from the central bank

in India as to its decision on the cost of borrowing, we will update

you, but now let's focus on the United States.

Federal Reserve chair Janet Yellen says a UK vote to leave the EU

could have "significant economic repercussions".

The central bank is meeting next week to decide if interest rates

She also reacted to the poor US jobs data from last week,

describing it as disappointing, but that it was outweighed

She talked about how a UK vote to leave the EU could have significant

repercussions - that is on her mind as she gathers to decide on rates in

June. The central bank meeting is next week. She also reacted of

course to the poor US jobs data on Friday, describing it as

disappointing. And that was outweighed by mostly positive

trends, she said. Let's go to Sharanjit Leyl for the Asian

reaction there. What are markets doing off the back of what she had

to say? Well I am just looking at them now and they are all

essentially higher with the exception of Shanghai. And of course

all of that due to those comments from the Fed reserve boss Janet

Yellen, essentially, as you said, she said the economy was still in

fairly good shape and any increase in borrowing costs would be fairly

slow and also reasonably low. So the fact that she didn't give any

indication of when they would lift interest rates was seen to be

somewhat good news by many investors here. There was a sigh of relief

that her comments actually help to steady nerves over in New York and

here and it was a huge relief after last week's dismal report on jobs

from the US as well. We're seeing the Nikkei in fact gaining somewhat

today despite the strength of the yen as well, so, really, you know,

her comments in rejecting a real sense of buoyancy, a little optimism

here. All right, we like optimism. Thank you so much. Nice to see you,

Sharanjit. In other news: Saudi Arabia's

cabinet has approved plans to diversify the country's

economy away from oil with the aim of creating

450,000 jobs by 2020. The National Transformation

Programme also aims to cut public spending by 40% over

the next five years. It's part of a number of initiatives

announced in April. French president Francois Hollande

says he wants Europe's largest hotel group to keep a diverse

group of shareholders. The comments have been seen

as a warning against China's state-owned Jin Jiang

from attempting a possible takeover Jin Jiang has been increasing

its stake in Accor, Greece must pay the International

Monetary Fund about $340 million While a relatively small amount,

it's the first in a number of repayments to international

creditors totalling about $12 billion, which fall

due in June and July. You might the grease brokered extra

help in the nick of time in order see through those payments due in

June and July. So, these are the markets and as

Sharanjit said, positive reaction to the fact that interest rates might

not be going up in the US soon, as in June and July. You can see the

yen has weakened a little as well versus the dollar compared with this

time yesterday, which really helps the Japanese markets. And look at

the price of oil, above $50 a barrel, Brent crude above that

significant psychological level. How long will it hold there? Keeping an

eye on the pound. The debate on the UK position in Europe continues. And

that is how it ended on Wall Street. I will see you