BlackBerry's maker is bidding to assuage security concerns but the government is cranking up the pressure in a row that could see core features of the popular smartphone shut down next week.
Research in Motion (RIM), the Canadian company that makes the world's best-selling business smartphone, said late on Thursday that it was prepared to set up an industry forum to resolve India's security concerns.
Government has raised fears that heavily encrypted BlackBerry services could be used by militants.
RIM said its offer "focused on supporting the lawful access needs of law enforcement agencies while preserving the legitimate information security needs of corporations and other organisations in India".
"In particular, the industry forum would work closely with the government and focus on developing recommendations for policies and processes aimed at preventing the misuse of strong encryption technologies while preserving its many societal benefits in India," it said.
The world's fastest-growing cellular market, is a crucial target market for RIM as increasingly affluent people buy smartphones.
But the government warned the company on Thursday that its messaging services could be shut down if it failed to give security agencies access "in readable format" ahead of next Tuesday's deadline.
Interior ministry said earlier this month it would cut off BlackBerry corporate email and messaging services unless RIM opens up its encryption for security agencies by August 31.
The latest warning came as media reported a decline in BlackBerry sales, with consumers uncertain over whether the government will go through with its threat.
"In case no solution is provided, those services which cannot be intercepted and monitored in readable format may be banned by the government," junior minister of state for telecoms Sachin Pilot told parliament.
Home Secretary GK Pillai is due to make a final decision on BlackBerry's fate at a meeting next Monday, the day before the deadline, an official at the home ministry said.
"We hope for a satisfactory resolution," the official said on condition of anonymity.
Home ministry officials have been holding discussions with RIM technical representatives and cellular phone companies on ways to break the impasse.
Government has already sent a notice to mobile operators ordering them to ensure security agencies can monitor BlackBerry messages by the end of the month.
The cellular operators are legally obliged to ensure security agencies have access to all services carried on their networks.
Islamist militants used mobile phones to coordinate the 2008 Mumbai attacks that killed 166 people.
A shutdown would affect corporate users among BlackBerry's 1.1 million customers, whose communications have a higher level of encryption. Government can already monitor so-called BlackBerry "consumer mails" that are less encrypted.