Internet shutdowns cost Indian economy $1.9 billion in 2023: report
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Kashmiri journalists hold placards and protest against 100 days of internet blockade in the region in Srinagar, Indian controlled Kashmir, Tuesday, Nov. 12, 2019. AP/Mukhtar Khan
New Delhi: Internet shutdowns imposed by law enforcement agencies in India, such as the recent ones in Manipur and Punjab, have resulted in a staggering financial loss of $1.9 billion for the Indian economy in the first half of 2023.
According to a report released on Thursday by the global non-profit organisation Internet Society, these shutdowns have not only affected the economy but have also led to a loss of approximately $118 million in foreign investment and caused over 21,000 job losses. The report, titled 'Netloss', calculated the financial impact of the shutdowns beyond the immediate loss of output. It took into account various factors such as changes in the unemployment rate, lost Foreign Direct Investment (FDI), risks of future shutdowns, and the population in the working age group.
Governments often resort to internet shutdowns as a means to maintain public order and address concerns related to misinformation and cybersecurity threats. However, the report highlights that such shutdowns severely disrupt economic activities. "Shutdowns are extremely disruptive to economic activity," the report stated, emphasising the misconception that they can effectively quell unrest or mitigate cybersecurity risks.
"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," said the report.
India has one of the highest shutdown risks in the world, with a 16% risk recorded so far in 2023. The frequent use of shutdowns in the country hampers e-commerce, causes losses in time-sensitive transactions, increases unemployment, disrupts business-customer communications, and poses financial and reputational risks for companies.
The Internet Society, established in 1992, strongly opposes internet shutdowns and urges governments to refrain from implementing them due to the detrimental impact they have on a nation's economy, civil society, and internet infrastructure. Andrew Sullivan, the President and Chief Executive of the Internet Society, expressed concern over the global rise in internet shutdowns and the disregard shown by governments towards the negative consequences of undermining the open, accessible, and secure nature of the global internet.