India has given Blackberry phone maker RIM a deadline of 31 August to give the government access to all of its services or face being shut down.
The country is reported to be considering similar bans on Skype and Google services, according to the Financial Times.
RIM has issued a statement outlining when it claims "lawful" access to encrypted data is acceptable.
It has no "special deals" with specific countries, it claims.
In the statement, RIM sets out four principles which underpin any request for access to data sent and received by Blackberry handsets.
It includes a stipulation that Blackberry services are not treated any differently to its competitors in terms of access.
It also states that "no changes to the security architecture for Blackberry Enterprise Server customers" can be made.
"RIM maintains a consistent global standard for lawful access requirements that does not include special deals for specific countries," reads the statement.
India fears the device could be used by militants and insurgents in a repeat of the 2008 attack on Mumbai that left 166 people dead.
The row is the latest in a long running dispute between Research in Motion (RIM) and international governments.
The central issue is how governments monitor the encrypted traffic from Blackberry devices.
The United Arab Emirates (UAE) was the first country to propose a block on the devices, saying they posed a "national security risk" in their ability to send messages and e-mail without the authorities having the ability to monitor the communications.
RIM sends this data to servers in Canada and the encryption used to secure this is virtually uncrackable.
Other countries followed the UAE's lead, including Lebanon, Algeria, Saudi Arabia and Kuwait.
India is the latest country to enter the fray, with analysts expecting more to follow suit.
In an interview with the Wall Street Journal, RIM's ceo, Michael Lazardis, was strongly critical of governments threatening to ban BlackBerry services, saying they risked undermining the growth of e-commerce.
"This is about the internet...everything on the internet is encrypted," Mr Lazaridis said.
"[and] this is not a Blackberry-only issue...if they can't deal with the internet, they should shut it off," he added
In 2008, the BBC reported that RIM was at loggerheads with the Indian government over demands that it help decrypt suspicious text messages.
RIM's answer then, as now, was that it does not allow any third party - or even the company itself - to read information sent over its network.
In July this year, RIM responded to a report in India's Economic Times that said the firm would allow Indian security authorities to monitor Blackberry services.
The firm said it co-operated with all governments "with a consistent standard and the same degree of respect", but denied it had ever provided anything unique to the government of one country that it had not offered to the governments of all countries.
Government officials said that if no solution between themselves and RIM was found, then they would ask mobile phone operators to block Blackberry's messaging and e-mail until RIM provides access to data transmitted over the handset.
A Home Ministry spokesperson confirmed that it had now issued a deadline to RIM to comply with its demands.
This differs from Saudi Arabia's demands, who only wanted access to the handsets messaging system.
There are more than one million Blackberry users in India, with the continent slated to be a significant market for smart phone manufactures as the country expands its network coverage.
The government say RIM had proposed helping authorities track e-mails without sharing encryption details but, say officials, that does not go far enough.
"(RIM) genuinely tries to be as cooperative as possible with governments in the spirit of supporting legal and national security requirements, while also preserving the lawful needs of citizens and corporations," said the firm.
Mr. Lazaridis said that his devices were being unfairly singled out by foreign governments out to score political points and while he would not comment on the status of individual negotiations, be believed a mutually agreeable settlement can be reached.
"We have dealt with this before and it will get resolved if there is a chance for rational discussion," Mr. Lazaridis said.