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India’s internet shutdowns cost its economy nearly $3 billion in 2020

People line up to go online at an internet cafe in Banihal, India
Thomson Reuters Foundation/Athar Parvaiz
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  • Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter

MumbaiPublished

India’s constant internet blackouts have taken a huge toll on its economy. National shutdowns left Indian businesses without hundreds of hours of vital internet access, costing billions in lost revenue.

Authorities cut Indians off from the internet for more than 1,655 hours as a result of national shutdowns, according to research by Top10VPN, a publication focused on internet privacy. And many people with internet still couldn’t use it without obstacles. Governments also deliberately reduced internet bandwidths for more than 7,200 hours, bringing speeds down to 2G—SMS and voice calls continue to function but modern websites and apps are rendered useless. It’s not too far from a complete blackout.

The economic cost of these restrictions amounts to a whopping $2.88 billion in 2020, according to Top10VPN. The economy has already been down in the dumps thanks to the pandemic, but India’s internet shutdown damage has doubled compared to last year, when an estimated $1.3 billion was lost.

The monetary loss is a result of internet shutdowns making digital services inaccessible to large numbers of people. There is often a significant loss of revenue for telecom operators. Several sectors, from education to healthcare to tourism, suffer if communication is curbed. Jammu and Kashmir, the conflict-ridden state in the north of the country, has been the biggest victim of this in India. Of the 460 or so internet blackouts in the country since 2012, more than 250 have been in J&K.

The state saw a complete internet blackout from August 2019 to March 2020. Once the internet was restored, internet speeds were severely throttled. Some techies in the region got creative, building apps that work with slower speeds, but many students, entrepreneurs, and even health professionals have already been forced to leave the region or have their work impaired by the lack of internet access.

Around the world, 27,000 hours of internet shutdowns in 2020 cost the global economy $4.01 billion, according to Top10VPN. Last year, India was the most economically impacted nation among the 21 countries in the study. (Internet outages due to natural disasters or infrastructural failures were not included, nor were outage days prior to 2020 for ongoing incidents.)

The damage is likely to be even worse than $2.88 billion, because Top10VPN only looked at nationwide bans. India restricted internet access more than 83 times in 2020, the majority of which were shorter regional blackouts that were “highly-targeted, affecting groups of villages or individual city districts,” and weren’t included in this analysis.

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