Fortune hosted dinner last night at the Waldorf in New York for Prime Minister Narendra Modi and several dozen U.S. CEOs, including those of Ford, Cisco, IBM, Lockheed, Marriott, Starwood, MasterCard, Merck, Pepsi, DuPont, Dow, EY and more.
The popular prime minister – he has an astonishing 87% favorability rating in India, according to my former colleagues at Pew Research – invited the CEOs to give their advice on how he can accelerate economic growth in India. And the CEOs were not shy in responding. They praised the prime minister’s efforts to improve the climate for business, but highlighted a host of obstacles – complicated regulations, excessive permitting, confusing bureaucracy, poor infrastructure, overlapping local taxes, etc. – and urged him to pick up the pace of change. Said one: “It’s not an easy place to do business.”
The prime minister acknowledged their concerns, and pledged to speed up efforts to reduce the role of government in business. “The world is not going to wait for us. I know that,” he said.
The high turnout from the CEOs highlights the prime position India holds in today’s global economy. With China slowing (several of the CEOs had met with President Xi Jinping in Seattle Wednesday), India’s 7.5% growth rate makes it the fastest growing major economy in the world today, and many of the CEOs cited plans to expand there.
More news below.
• VW likely to tap Porsche’s Mueller
Volkswagen’s supervisory board will reportedly pick Porsche chief executive Matthias Mueller as the troubled German automaker’s new CEO. The leadership change comes in the wake of a massive emissions scandal that affected millions of cars and led to this week’s resignation of VW CEO Martin Winterkorn — who could still walk away with a pension of about $32 million. Mueller has worked within VW’s group of brands for nearly four decades, having joined Audi in the 1970s. Fortune
• Yellen: Rate hike “will likely be appropriate” this year
Federal Reserve chair Janet Yellen made a strong case for why the country’s central bank will raise interest rates before the end of the year. Speaking at the University of Massachusetts in Amherst on Thursday, Yellen said that the inflation rate will likely move toward the Fed’s 2% target as the employment recovery continues and that a “prudent strategy is to begin tightening in a timely fashion and at a gradual pace” in order to avoid any rash moves in the markets. The Fed, which voted last week to keep its short-term interest rate target near zero, will have another policy meeting at the end of next month. Yellen, 69, is also reportedly fine despite requiring medical attention shortly after her speech. Wall Street Journal (subscription required)
• New U.S.-China climate change plan
The U.S. and China will announce on Friday a new set of policies geared toward fighting climate change, led by a national cap-and-trade program in China. With a United Nations conference aimed at addressing climate change scheduled for this fall, the U.S. and China — the world’s two biggest polluters — want to act as leaders by implementing policies regarding building efficiency and vehicle emissions. The announcement will come as President Barack Obama hosts Chinese President Xi Jinping for a much-hyped state visit. Fortune
• Earnings spur Nike shares to all-time high
Shares of Nike shot up more than 7% in after-hours trading on the strength of the athletic apparel giant’s strong first-quarter earnings report, which included a 30% sales bump in greater China where the economic slowdown had investors concerned over a potential decrease in spending. The after-hours burst sent Nike’s stock to an all-time high as the company’s overall first-quarter performance outpaced Wall Street’s expectations. Fortune
Around the Water Cooler
• Jack Ma: Alibaba will pass Walmart in sales this year
China’s economy may be struggling, but Chinese e-commerce giant Alibaba continues to grow anyway, according to chairman Jack Ma, who said Thursday night that he expects his company to pass Walmart in sales volume as soon as this year. In an interview at Stanford University’s business school, Ma said that China’s economic downturn spurs sales growth as “people look online to Alibaba to buy cheaper things.” Ma’s comments come at a time when investors have shown concern over growth at the e-commerce company, causing its stock to decline a year after its massive IPO. Fortune
• Netflix’s plan to be more original
Popular streaming service Netflix, which has been working hard in recent years to expand its portfolio of original content, has plans to increase its involvement — as well as its financial stake — in future original projects by leasing studio space and exerting control over other production aspects. At the moment, some Netflix original hits — such as Orange is the New Black and Daredevil — are produced by other companies, with Netflix acting as distributor. Producing its own shows will prevent Netflix from eventually losing the rights to those shows when agreements with outside companies end. Bloomberg
• The online ad industry is a mess
It’s no secret that intrusive web ads are viewed as a problem by people surfing the web — that’s why ad blocking has become more and more prevalent. But, the online advertising industry is also facing another major issue in the form of outright fraud, with some advertisers left paying for online campaigns that are mostly seen only by “bots” or automated programs. It’s possible that ad blocking will serve as a needed wakeup call to an industry stuck in a cycle where ad buyers settle for discounted rates in exchange for essentially hollow traffic stats. Fortune
5 things to know today
Yellen’s rate hint and a new VW CEO — 5 things to know today. Today’s story can be found here