The State of Cryptography in India

Encryption is the key instrument of the digital world that protects privacy, free expression, and civil rights. Today, ambitious plans for the digitization of the economy rely on the ability to build and nurture trust that is ostensibly fueled by critical technologies such as encryption.

To illustrate this further, let’s take the example of SSL and TLS protocols which has enabled the proliferation of e-commerce, digital banking and transactions. In the absence of encryption, the e-commerce or the digital banking industry would have arguably not witnessed the level of growth they have today. India’s $2.27 trillion banking industry would have been significantly undersized as trust and security in online banking would never exist as critical sensitive data of millions of Indians would be open to fraud and theft.

The role of encryption in the proliferation of e-commerce in India may be even more pronounced. The underlying trust created by digital transactions has arguably been one of the most critical factors in driving this growth. Today, the Indian E-commerce industry is expected to grow at a CAGR of 27% over 2019-24 and will reach a value of US $ 99 billion by 2024. However, in the absence of a secure transactional system empowered by cryptography, these projections would be much paler.

Furthermore, encrypted messaging services are arguably one of the most effective tools in enabling entrepreneurs to start and grow small businesses. Private messaging allows businesses to communicate safely and securely with customers, employees and suppliers, sharing sensitive financial, commercial and personal information.

Similarly, in the space of private communications, encryption plays a crucial role in securing user data from both state and non-state actors. Encryption protects our private messages and allows us to share our most important information and moments safely with families and friends, without having to worry about criminals, hackers or fraudsters. An encrypted place is a safer place to communicate. It protects not just sensitive information like bank details, but also family photos and videos, passwords, your health records and even the location data of your loved ones. Cyber-attacks, hacking and identity theft are now commonplace. Criminals are constantly looking to access the information we share on our phones and in our most intimate conversations. As we conduct more of our lives online and on our phones, we need to protect ourselves and our families. Encryption also helps protect at-risk people like minorities, activists, journalists and marginalized groups by giving them safe, secure channels to communicate amongst themselves and to report crimes.

While most technologists and privacy advocates understand the value that various deployments of encryption technologies bring to a country and its people, its importance may not be understood entirely by policymakers and the society at large.
For example, the law enforcement and intelligence ecosystem in some countries have called for creating backdoors to encryption. Recently India along with Japan and the 5 eyes alliance signed an international statement calling on technology companies to create such backdoors. Similarly, in Brazil, there’s currently a law in the Senate that, if passed, would compel, private messaging companies to trace the source of messages, thereby effectively breaking encryption. Australia adopted legislation several years ago modelled after UK Law that could be interpreted to require communications service providers to build in backdoor access. In the case of India, a proposed amendment to the Intermediary Guidelines in 2018 called for traceability of messages on request of a competent authority. In continuation of this, the Government of India announced on 25th February 2021 that “Significant Social Media Intermediaries”, which are involved primarily in the business of messaging services will need to enable identification of the first originator of the message. At the same time, another approach has been recommended by the Telecom Regulatory Authority of India—that tinkering with end-to-end encryption will change the architecture of messaging platforms fundamentally to the extent that it would have an adverse impact on user security and privacy and it would wait to see if a satisfactory solution emerges before prescribing any norms around this.

We have also witnessed strong support within the government and civil society to adopt blockchain technology as a means to build integrity first governance systems. In 2020, the NITI Aayog released a Discussion Paper on Blockchains that identified several key areas of inefficiencies within the governance ecosystem where blockchain technology can help rebuild trust. These areas range from the creation of streamlined and auditable pharmaceutical supply chains to the maintenance of immutable land and tenancy records. The core principles that guide this technology are transparency, decentralization and accountability. While the deployment of this technology for governance use-cases is at a very nascent stage, this development also underscores how a crypto-based technology can potentially transform the business of government and consolidate trust in the delivery of citizen-centric services.

These developments in India warrant greater deliberation and debate with a view to arriving at solutions that help India in maintaining its constitutional guarantees and leveraging cutting edge encryption technologies in order to improve governance, create economic opportunities, expand the digital economy and safeguard the security and privacy of all Indians.

At CIPHER, it will be our endeavour to engage in these discussions and bring expert views to the forefront to raise awareness about cryptography and its multiple benefits for Indian society.