Saudi Arabia and the United Arab Emirates have also threatened to cut off popular BlackBerry services unless they get greater access to user information. Like India, they've cited security concerns in pushing for access to encrypted information sent by the phones that gets routed through the Canadian company's servers overseas.
Research In Motion had no immediate comment.
If RIM fails to meet India's security demands, the BlackBerry email service and instant messaging would get shut down.
India has asked for encrypted BlackBerry communications to be made easily available to its intelligence and law enforcement agencies, saying that the services could be used by militant groups.
The 10 heavily armed gunmen who rampaged through Mumbai, India's financial capital, in November 2008, killing 166 people, used cell and satellite phones to communicate with their Pakistan-based handlers, according to Indian officials.
Research In Motion had no immediate comment on India's announcement. It has said its discussions with regulators around the world are private.
The announcement came after a meeting of India's home secretary, an official in charge of domestic security, and representatives of security agencies and the government's telecommunications department, the ministry said in a statement.