A report released by the global non-profit organisation Internet Society on Thursday revealed that internet shutdowns conducted by law enforcement agencies in Manipur and Punjab resulted in a staggering $1.9 billion loss to the Indian economy during the first half of 2023. The report, titled 'Netloss', further highlighted that these shutdowns also caused a decline of nearly $118 million in foreign investment and led to over 21,000 job losses (via PTI).
The financial impact of these shutdowns, as calculated by the non-profit, extended beyond the immediate loss of output. The report took into account factors such as changes in the unemployment rate, lost Foreign Direct Investment (FDI), risks of future shutdowns, and the working-age population.
Despite the intentions of law enforcement agencies to quell unrest, combat the spread of misinformation, and address cybersecurity threats, the report emphasised that internet shutdowns are highly disruptive to economic activity. It further revealed that India's frequent use of shutdowns as a means of maintaining public order has resulted in a shutdown risk of 16% in the country so far in 2023, making it one of the highest in the world.
The detrimental effects of shutdowns on the economy are manifold. They disrupt e-commerce, cause losses in time-sensitive transactions, increase unemployment rates, interrupt business-customer communications, and pose financial and reputational risks for companies.
The Internet Society, founded in 1992, expressed its strong opposition to shutdowns and called on governments to refrain from implementing them due to the extensive damage they inflict on a nation's economy, civil society, and Internet infrastructure.
Andrew Sullivan, the President and Chief Executive of the Internet Society, highlighted the global trend of rising internet shutdowns and criticized governments for disregarding the negative consequences of undermining the open, accessible, and secure nature of the global internet.