BlackBerry's Canadian maker will provide India with technical solutions next week to help read its encrypted data that New Delhi sees as a security threat, a senior government source said on Friday.
The assurance raised hopes that India might withdraw its threat to ban messenger and encrypted email.
India has given Research In Motion, the maker of the popular BlackBerry smartphone, until Aug 31 to comply with a request to gain access to encrypted corporate email and messaging services or those services will be shut.
RIM is under pressure from governments around the world to give access to its codes. Other firms have also faced scrutiny since officials intensified their fight against Islamic militants misusing mobile devices.
The government source said: "They have assured that they will come with some technical solution for messenger and enterprise mail next week. Our technical team will evaluate if it works."
The source, who spoke on condition of anonymity, also said the government had concerns over Internet telephony and would take it up with companies such as Skype.
Earlier in the day, BlackBerry officials met Indian authorities, now pledged to go after firms, including Google, to keep the world's fastest growing mobile phone market safe from militants and cyber spying.
After the meeting, Robert Crow, a vice president at BlackBerry, expressed optimism that the company would resolve India's worries.
He said:"It is a step in a long journey."
At 1405 GMT RIM shares were down 1.5 percent at C$55.59, despite the assurances.
Pakistani based militants used mobile and satellite phones in the attacks on Mumbai in 2008, which killed 166 people. The militants were suspected of using Internet telephony, which is widely available.
The authorities have for more than a year been looking at Google's messaging, Skype and other providers of communication in India.
Speaking to Reuters, a senior security official, who declined to be identified, said: "Wherever there is a concern on grounds of national security the government will want access and every country has a right to lawful interference."
India has already forced mobile phone operators, including leading Bharti Airtel, to follow strict import rules when buying telecoms network equipment.
Chinese manufacturers Huawei Technologies and ZTE Corp have been temporarily prevented from shipping network equipment for fears of embedded spyware.
The same source said: "We have concerns regarding these (Google and Skype) services on grounds of national security and all those services which cannot be put to lawful interference."
India's demands follow a deal with Saudi Arabia, where a source said RIM agreed to give authorities codes for BlackBerry Messenger users. The UAE, Lebanon and Algeria also seek access.
How much brinkmanship is involved remains to be seen. Not one country recently threatening to ban BlackBerry corporate email or messaging services has carried through with the threat.
A senior official with a mobile phone operator in India, who did not want to be identified, said: "We don't expect a ban actually. There will be some solution before the deadline."
Officials say RIM had for a time proposed tracking emails without sharing encryption details, but that was not enough.
India, like other countries, has been criticised for seeking blanket restrictions while mobile phone operators say they have to offer consumers privacy and secure communications.
India is also keen to retain its position as one of the world's fastest growing IT nations.
Competitors have eaten into RIM's once dominant share of the North American smartphone market, pushing the company to look to places like India and Saudi Arabia for growth.
A shutdown would hit one million users in India out of the smartphone's 41 million users, allowing them to use the devices only for calls and Internet browing.
RIM, unlike rivals Nokia and Apple, operates its own network through secure servers located in Canada and other countries, such as Britain. (Reuters)For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.