The Indian government passed a law that now requires all VPN service providers to keep records of their users for five years. While this new rule is necessary for security reasons, it violates the core principles of a VPN and has rendered it pointless for a number of users.
VPNs are used by individuals and businesses to encrypt their online presence and activities. The new national directive applies not only to VPN companies, but also to cloud service providers, data centers and crypto exchanges to collect specific, extensive customer data and keep it for at least five years. Businesses must also report “unauthorized access to social media accounts” under the policy.
A VPN works by masking a user’s IP address and assigning them a temporary or shadow IP address. Most commonly this is used to cross geopolitical boundaries and access content on the internet that is restricted in certain areas. VPNs have long been essential for users looking to maintain their online privacy.
VPNs are also used by corporate agencies to allow their employees to remotely log into their work systems without having to make compromises that would put them at risk.
The core function of a VPN is that it separates the websites you visit from your IP address. India has never had legislation that banned VPNs outright. However, when VPN service providers fail to comply with the policy, they become illegal as a by-product.
While there are several benefits to using a VPN, especially for businesses and multiple entities, there are some bad elements that give VPNs a bad name. We take a look at some of the reasons that led the Indian government to introduce this mandate.
strengthening national security
Be it digital security or the security of our borders, some bad elements have actively used VPNs to avoid detection. Hackers around the world use VPNs to power and launch cyber attacks on government institutions. From border infiltration by smuggling cartels to sharing national secrets that would compromise a border, there have been several recorded incidents in our history of people using VPNs to collaborate with outside forces. This alone is the main reason why the Indian government has made it required for service providers to keep records of their users’ activities.
social turmoil
Several anti-social elements have used VPNs to obfuscate themselves and their locations so they could post inflammatory statements and comments that would foment community fires in a society. For example, there have been a number of incidents where certain individuals have posed as residents of another country or community and made some rather disturbing statements on social media.
Crackdown on Money Laundering
With the advent of digital banking and cryptocurrency, money laundering has become very sophisticated and extremely difficult to combat. VPNs further complicate the problem. A person sitting in India can easily get millions of dollars from illicit sources in the form of crypto with no apparent traces.
Crackdown on online piracy
There are legitimate ways to share and consume goods protected by intellectual property rights, and then there’s piracy. In recent years, governments have taken very strict action against piracy. However, VPNs still allow criminals to get away with online piracy.
implement content censorship
Censorship in India is a very sensitive issue. On the one hand there is the whole concept of freedom of speech and freedom of thought. On the other hand, we need to protect multiple communities and sentiments. Certain content is often banned from the public domain because of its potential to create tension in the community. However, VPNs allowed users not only to consume such content, but also to share it.
What is interesting is whether certain VPN companies will launch India-specific VPNs that comply with the new Indian government guidance, or whether they plan to shut down the Indian market entirely. Thanks to the prolific IT businesses we have, Indian companies are a major source of revenue for a number of VPN and cloud service providers. Certainly for some of these service providers based outside of Asia, severing from their Indian customer base is not a viable option.
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