BlackBerry maker Research in Motion (RIM) on Thursday skipped a crucial meeting with the government over national security fears. Private service providers Vodafone and Airtel were also absent at the meeting.
According to the CNN IBN, the mobile mobile phone operators said that they were not invited to the meeting and that a top RIM official is now meeting a home ministry official.
Worried about national security, interior ministry held the meeting to press for a deadline to be fixed for RIM to share encryption details.
A senior government official said on Wednesday that if there was no solution, the government would ask mobile phone operators to block BlackBerry messaging and email until RIM provides access to data transmitted over the handset.
A shutdown would affect one million of the smartphone's 41 million users. India is one of RIM's fastest growing markets.
If a shutdown takes effect, BlackBerry users in India would only be able to use the devices for phone calls and Internet browsing.
The Indian demands follow a deal with Saudi Arabia, where a source said RIM has agreed to give authorities codes for BlackBerry Messenger users. The United Arab Emirates, Lebanon and Algeria are also seeking access.
India fears BlackBerry could provide cover for militant activities. In 2008, a Pakistani-based group used mobile and satellite phones to coordinate attacks in Mumbai that killed 166 people.
A spokesman based in India for the Waterloo, Ontario-based company did not comment on the talks.
Investor attention is focused more on whether the new BlackBerry Torch, a touch-screen model unveiled last week to compete against Apple's iPhone and handsets using Google's Android software, will live up to its hype.
The BlackBerry image could suffer if users feel RIM has compromised its Enterprise email system -- long valued by business executives and politicians for secure communications. Corporate and consumer customers both use its BlackBerry Messenger instant messaging.
India seeks access to both email and Messenger, while Saudi Arabia has only targeted the instant messaging service.
RIM is alone among its competitors in facing such demands. Unlike rivals Nokia and Apple, it operates its own network through secure servers in Canada and elsewhere.
RIM has said BlackBerry's Enterprise system lets customers create their own key, and the company has neither a master key nor a "back door" to allow it or any third party to access crucial corporate data.
India's security establishment wants RIM to give it access to encrypted messages in a readable format. Officials say RIM has proposed helping India track emails without sharing encryption details, but that is not enough.
Bharti Airtel and Vodafone's India unit are the largest providers of BlackBerry services in India. While national security appears to be India's main concern, Middle Eastern countries are concerned that BlackBerry users may spread pornography or violate restrictions on contact between unrelated men and women.