The most inflammatory part of the effort has been India’s threat to block encrypted BlackBerry services, widely used by corporations, unless phone companies provide access to the data in a readable format. But Indian officials have also said they will seek greater access to encrypted data sent over popular Internet services like Gmail, Skype and virtual private networks that enable users to bypass traditional telephone links or log in remotely to corporate computer systems.
Critics say such a threat could make foreigners think twice about doing business here. Especially vulnerable could be outsourcing for Western clients, like processing medical records or handling confidential research projects, information that is typically transmitted as encrypted data.
“They will do damage by blocking highly visible systems like BlackBerry or Skype,” said Ajay Shah, a Mumbai-based economist who writes extensively about technology. “This will shift users to less visible and known platforms. Terrorists will make merry doing crypto anyway. A zillion tools for this are freely available.”