The Goldman board held the meeting in Mumbai on Thursday against a deteriorating economic and political backdrop in India, where business is slow, economic growth has cooled and regulation has become a minefield for foreign investors.

Still smarting from knocks to its own reputation, the Wall Street firm's director closeted themselves on an upper floor of Mumbai's Taj Mahal Palace hotel, which was heavily damaged in a 2008 militant attack on the financial capital.

Goldman showed the adverse publicity has not weakened its pulling power, as the board used the event to host a lunch meeting for prominent Indian business leaders.

Industrialists including Mukesh Ambani, Asia's second-richest man, according to Forbes, and chairman of Reliance Industries (RELI.NS); and Ratan Tata, head of India's biggest business house, the Tata group, which also owns the Taj hotel chain, were also due to have met the executives, sources said.

Both companies, as well as Goldman, declined to comment.

Goldman Chief Executive and Chairman Lloyd Blankfein, Chief Operating Officer Gary Cohn and the rest of the Goldman entourage were due to travel on Friday to New Delhi, the sources added.

Board meetings rarely generate this much attention, but for Goldman, the India event comes amid a flurry of news, and media were kept at a distance.

Goldman, long Wall Street's dominant investment bank, has become a lightning rod for criticism of the financial industry in the aftermath of the global financial crisis.

The unwelcome spotlight was trained on it again this month when a mid-level executive resigned and fired off a blistering attack on the firm in a New York Times op-ed on March 14, describing a "toxic and destructive" culture motivated by greed.

Greg Smith's scathing remarks, in which he said he'd heard executives refer to clients as "muppets", have prompted an outpouring of criticism, ridicule and defense of Goldman.

Earlier this month, it was accused of conflict of interest for advising El Paso Corp (EP.N) on its sale to Kinder Morgan (KMI.N), while being a significant shareholder in Kinder.

Blankfein responded to Smith's letter by urging Goldman employees to reach out to clients to reassure them, saying the firm had support from CEOs all over the world.

Also fuelling speculation around the meeting is a possible plan to separate Blankfein's CEO and chairman roles, a move long sought by outside investor groups who believe separating those positions enables better corporate governance.

However, pressure for such a move eased after one of the largest U.S. labor unions said on Tuesday it had withdrawn a shareholder proposal to split the chairman and CEO jobs after Goldman agreed to alter its board structure.

TOUGH MARKET

As hotel staff milled around the ornate lobby in bright red saris or dark blue suits on Thursday, security personnel began to stand around the lobby as staff asked journalists to leave.

Indian-born Lakshmi Mittal, chairman and CEO of ArcelorMittal (ISPA.AS) and a Goldman director since 2008, would not comment on the meeting's agenda or whether the board had discussed the separation of Blankfein's roles, when questioned by reporters in the hotel lobby.

Goldman declined to give any details on the India meeting.

A source previously told Reuters the U.S. bank had scheduled it in India in a sign of its "commitment" to the emerging market.

It was Goldman Sachs Asset Management chairman Jim O'Neill who coined the term BRIC - Brazil, Russia, India and China - to signal the economic promise of the developing nations.

But India's once-scorching economy grew at just 6.1 percent in the December quarter, its slowest in nearly three years, and deal flows have been sluggish for more than year, with banks cutting jobs. Even in flush times, India is a notoriously tough investment banking market, with fierce competition and low fees.

Meanwhile, Goldman has yet to receive a commercial banking license after applying two years ago, which means it cannot engage in foreign exchange and commodity trading in the country.

Goldman earned $15.3 million in fees on share and bond offerings and M&A advisory last year in India, fifth among foreign banks and seventh overall, according to Thomson Reuters.

India's fee pool is small compared to other major Asian markets, hitting $254.3 million last year, down about one-third from a year earlier.

Last year, Goldman bought India's Benchmark Asset Management Co and appointed veteran commercial banker Sonjoy Chatterjee as head of its India business.

(Additional reporting by Nandita Bose in MUMBAI, Michael Flaherty and Lawrence White in HONG KONG; Editing by Tony Munroe and Alexander Smith)

• A Permanent Economic Emergency