INDIA FILE — Modi's three — pronged challenge

By Ira Dugal Oct 13 (Reuters) — Troubles are said to come in threes. For Narendra Modi, now in his 13th year in power, that may be more than a figure of speech. The Indian prime minister is facing an unusual convergence of stresses: a youth protest movement that shows little sign of fading, increasingly strained ties with the United States, and renewed pressure on the rupee despite a series of government and central bank interventions. The youth movement known as the Cockroach Janta Party (CJP), which began as a joke but helped force the resignation of the education minister over exam paper leaks, has now turned its attention to India's chief election commissioner.

For much of the past decade, Modi has appeared politically unassailable. But the converging issues are creating an unusually difficult backdrop for his government. Is Modi facing his toughest test yet? That's our focus this week.

Write to me at This Week In Asia The oil market's center of gravity is moving east: Maguire China’s slow bull market is poised to take off Japanese PM Takaichi's campaign to shed reflationist image needs substance behind the speeches Iran’s wartime hunt for protesters at home and abroad ushers in a new era of repression A Confluence Of Factors Over the weekend, hundreds of protesters were detained, internet services cut off and travel disrupted in parts of the national capital New Delhi as authorities tried to rein in agitations against a recent drive to review the country's electoral rolls.

The change that started last year led to over 130 million names — more than the population of Japan — being struck from voter lists, including 28 million who had died, 63 million who had relocated, and 30 million who could not be traced. Read here to understand more. While the Cockroach Janta Party has not fought elections, and Modi's Bharatiya Janata Party (BJP) has comfortably won key elections across states in recent months, the youth protests have grabbed attention.

"We expect India’s second Cockroach protest campaign to grow over the coming weeks and see a meaningful chance that it eventually exceeds the July movement," said BMI, a unit of Fitch Solutions, in a report last week. "The CJP now has stronger organisation, a broader grievance, and support from parallel opposition mobilisation," BMI said, but added that a nationwide snowball effect is not assured given uneven participation beyond large metros. Who are the people behind the movement? Read here for more on Abhijeet Dipke, the founder of the CJP.

External Pressures Strains on the Modi government's internal policies are coming alongside testing times for relations between New Delhi and Washington. A trade deal, under negotiation for months, appears to have hit a plateau, Indian Finance Minister Nirmala Sitharaman said. While neither side has explained why the talks have failed to make progress, a bill that gives President Donald Trump authority to impose tariffs of up to 100% on imports from countries buying significant Russian oil, including India and China, is seen as one key factor. My colleagues Shivangi Acharya and Manoj Kumar explain.

A recent shift in the Modi government's tone from conciliatory to confrontational is likely a realisation that India cannot afford politically to stay quiet, said Michael Kugelman, a resident senior fellow for South Asia at the Atlantic Council in Washington. "Much of the Indian public is angry at the Trump administration for its tariffs on India, its embrace of Pakistan, its criticism of India, and more," Kugelman said. The US has also moved to curb the Permanent Labor Certification program, once used actively by Indian IT firms like Infosys and TCS among others.

But these firms have over the past five years reduced reliance on exporting Indian talent to the US, analysts said, limiting any immediate impact. Rupee On The Defensive Escalating tensions with the US could only worsen pressures on the Indian currency stemming from higher oil prices and selling of Indian assets by foreigners. The Indian economy continues to grow at a rapid pace of above 7%, remaining the fastest-growing major economy in the world. Yet, foreign portfolio investors have sold Indian assets at a record pace, fearing the impact of high oil prices on Asia's third-largest economy.

A lack of AI-related investment options has also left investors lukewarm on India. The result has been persistent pressure on the value of the rupee — often a political sore point. Over the weekend, the Indian central bank stepped in with a fresh set of measures to curb dollar demand after a rate hike earlier in the week failed to stem weakness in the currency. Read here for a factbox on the many steps India has taken this year to support the rupee.

The trade tensions are an additional risk to India's macroeconomic prospects and the rupee, which is hurting partly due to outflow of growth capital provided by foreign investors, said Dhananjay Sinha, CEO of Mumbai-based Systematix Group. "The reason why India may have taken an aggressive stance is because politically they are looking fragile domestically and they may not want to be seen as bowing to US pressure," he said. 54% in September — the highest in a new data series rolled out in February, data released on Monday showed. 74%.

The rise in the inflation rate comes alongside elevated household inflation expectations and is likely to prompt up to 75 basis points more in rate hikes from the central bank. The Reserve Bank of India hiked rates for the first time in nearly four years last week. This Week's Must-reads Top reads this week come from across commodities, equities and a familiar battle between infrastructure and human interests playing out near India's financial capital Mumbai: Niger or Nigeria? India probes soybean imports over suspected tax evasion, Rajendra Jadhav reports.

Residents are fighting Amazon data centre rising metres from homes near Mumbai, Vibhuti Sharma, Munsif Vengattil and Aditya Kalra report. India markets regulator to partly reverse derivative settlement rules after pushback, Jayshree P. Upadhyaya reports. com; +91-9833024892;)