R. Chandrashekhar, a top civil servant in India's telecommunication ministry said, “The issue is heading towards a resolution and I think necessary action is being taken in consultation and with the cooperation with all the agencies concerned”.

The concern is about the data which goes through RIM's system for corporate email, BlackBerry Enterprise Server and BlackBerry Messenger, which has high levels of encryption. RIM already has provided the government with solutions to conduct lawful surveillance of emails held by individuals and BlackBerry Messenger. But the company says it can't decrypt the corporate emails.

The Canadian company has been losing market share to Apple Inc's iPhone and other Smartphone devices in recent months. One of Blackberry's biggest draws for corporate clients is that RIM operates its own network of high-security email servers, unlike other Smartphone companies. The company sees India as a huge potential market.

India also is setting up infrastructure to collect information transmitted through emails, computer networks and Smartphones, which will enable investigators to directly access data from telecom operators. But BlackBerry's advanced encryption technology means India will not be able to access its corporate emails through this infrastructure.