BBCIndian Blackberry users could face a ban after the gadget's maker failed to meet a government deadline to grant access to all its services.
Officials in Delhi say they need to read encrypted Blackberry messages to help guard against terrorist attacks.
They have been locked in negotiations with Research In Motion, which makes the popular device, since last summer.
However as a January 31 deadline passed, RIM said it would not lift encryption for its business clients.
Indian officials are concerned that encrypted e-mail could be used to coordinate terrorist attacks similar to those that hit Mumbai in November 2008, killing 164 people.
An investigation into the tragedy found that those involved were largely guided by mobile phone and internet messages sent from a base in Pakistan.
In the wake of the attacks, the Indian authorities enacted a series of reforms of communications laws to give it access to encrypted messages and to prevent the use of untraceable mobile handsets.
The Blackberry has proved a particular thorn in its side, however, because of the popularity of its encrypted services.
The BlackBerry's secure e-mail has made it the mobile phone of choice for many companies around the world, allowing users to easily encode messages to screen them from prying eyes.
As a result, Delhi has been threatening to ban the device entirely if Research in Motion did not comply with its wishes.
Although the Canadian company made some concessions in recent weeks, it said that complying with the January 31 deadline had proven technically impossible because does not have the ability to unencrypt messages.
"There is no possibility of us providing any kind of a solution," said company vice president Robert Crow last week. "There is no solution, there are no keys to be handed."
It is unclear what steps the government may take as a result of the missed deadline, but senior officials have warned that they would not take no for an answer.
"We will insist they give us a solution," India's home minister, P Chidambaram, told reporters on Monday in response to Crow's comments.
Ban 'unlikely'
It is the latest move in a game of brinkmanship between the two sides.
Indian authorities were on the verge of banning the device last August, but ultimately granted Research In Motion an extension. The war of words with the technology company continued, however.
Local media reports suggest that a total ban is unlikely, although such a move would not be entirely unprecedented.
The gadget was banned temporarily for similar reasons by the Saudi Arabian authorities last August, with service interrupted for several hours before a deal was reached.
Officials in the nearby United Arab Emirates, meanwhile, retracted their threat to ban Blackberry handsets in October after reaching a "satisfactory" agreement with the company.
At the same time, however, diplomats and politicians in other countries are banned from using the devices because of concerns about lax security.
France banned officials from using Blackberrys in 2007 amid concerns that they could be spied upon too easily, while earlier this week Pakistan enacted a similar ban - which has since been reversed.
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