A meeting with authorities was “inconclusive” and the superpower has given the firm until the end of the month to address its concerns.
India is worried that BlackBerry’s encrypted data can be used by terrorists such as those involved in the Mumbai attack. It is especially concerned about its Messenger service.
Officials say RIM proposes tracking emails without sharing encryption details, but Indian sources say that is not enough.
The latest setback for RIM follows a ban in the UAE and a deal with the Saudi Arabian authorities to provide them with some user’s data.
A shutdown would affect 1m of the smartphone maker’s 41m users. But with India being one of RIM’s fastest growing markets, this would be a disaster for the firm.
This year, India restricted imports of Chinese telecoms network equipment over security fears. It is also worried about the introduction of 3G wireless services with no monitoring system in place.
RIM, unlike rivals Nokia and Apple, operates its own network through secure servers.