Internet shutdowns in Manipur, Punjab reportedly cost Indian economy $1.9 billion

Recent internet shutdowns in the states of Manipur and Punjab have resulted in severe economic losses for India. With an estimated cost of $1.9 billion, the shutdowns have not only affected the country's economy but have also caused a loss of foreign investment amounting to nearly $118 million and led to approximately 21,268 job losses. These alarming figures highlight the detrimental impact of internet shutdowns on India's economic stability. Moreover, India's frequent use of such shutdowns to maintain public order has given the country a high shutdown risk, reaching 16 per cent in 2023, according to the NetLoss calculator developed by The Internet Society.

The NetLoss calculator, hosted on The Internet Society's Pulse Platform, aims to assess the economic consequences of internet shutdowns worldwide. The tool has revealed that India is grappling with one of the highest shutdown risks globally. By repeatedly resorting to internet shutdowns, India risks impeding its own economic progress.

Internet shutdowns have become a distressing global trend, reaching a record high in 2022. Governments across the world have ordered restrictions or complete blockages of internet access and services during times of civil unrest, school examinations, and elections. These actions have had severe economic implications for the affected nations.

The rise in internet shutdowns globally signifies the disregard of governments for the negative effects of undermining the open, accessible, and secure nature of the internet. Andrew Sullivan, President and CEO of The Internet Society, stresses that governments should recognise the harmful outcomes associated with such actions.

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According to the IANS report, governments often erroneously believe that internet shutdowns can quell unrest, curb the spread of misinformation, or mitigate cybersecurity threats. However, the reality is that these shutdowns have far-reaching consequences for economic activities. They disrupt e-commerce, hinder time-sensitive transactions, increase unemployment rates, interrupt business-customer communications, and expose companies to financial and reputational risks.

The report highlights that internet shutdowns not only inflict immediate economic losses but also impede a country's long-term growth. Research indicates that internet adoption has a positive correlation with Gross Domestic Product (GDP). By hindering internet access, governments hamper progress and limit the potential for economic development.

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