Internet Shutdowns in India Cost $1.9 Billion to the Country’s Economy in the First Half of 2023: Report

Internet shutdowns by law enforcement agencies like the one in Manipur and Punjab cost $1.9 billion (nearly Rs. 15,590 crore) to the Indian economy in the first half of 2023, a report said on Thursday.

The shutdowns also led to a loss of nearly $118 million (nearly Rs. 968 crore) in foreign investment and triggered over 21,000 job losses, the global non-profit Internet Society said in its report ‘Netloss’.

The non-profit arrived at the financial impact of the shutdown going beyond the loss of output and included factors like change in the unemployment rate, Foreign Direct Investment (FDI) lost, risks of future shutdowns, population in the working age etc.

“Governments often mistakenly believe that internet shutdowns will quell unrest, stop the spread of misinformation, or reduce harm from cybersecurity threats. But shutdowns are extremely disruptive to economic activity,” the report said.

India’s regular use of shutdowns as a tool to maintain public order gives India a shutdown risk of 16 percent so far this year, one of the highest in the world as of 2023, it said.

Shutdowns halt e-commerce, generate losses in time-sensitive transactions, increase unemployment, interrupt business-customer communications, and create financial and reputational risks for companies, it said.

The non-profit started in 1992 made it clear that it is opposed to shutdowns and urged governments to refrain from implementing them due to the damage they inflict on a nation’s economy, civil society, and internet infrastructure.

“The global rise in internet shutdowns shows that governments continue to ignore the negative consequences of undermining the open, accessible, and secure nature of the global internet,” Internet Society president and chief executive Andrew Sullivan said. 

© Thomson Reuters 2023