If the reports were true, it suddenly means that the Indian government can find out exactly what all businesses and individuals are saying on the RIM network. India has wanted access to this for some years now.
One of the reasons many signed up to RIM was that its encryption prevented government officials handing on information to their rivals.
According to Reuters, India was one of the Canadian smartphone maker's few growing markets.
RIM has been fighting with the Indian government for years, and has denied that it can provide access to its enterprise email and messaging services. This is because the company itself does not possess the encryption keys for the same and these remain in the control of its corporate clients.
But the Economic Times quoted a telecom department official and saw certain documents that RIM had provided the Indian government a system that gave it access to corporate emails.
RIM denied this and has refuted similar claims in India over the last two years.
While RIM is providing an appropriate lawful access solution that enables India's telecom operators to be legally compliant with respect to their BlackBerry consumer traffic,it does not extend to secure BlackBerry enterprise communications, the company said in a statement.
RIM gave India access to its consumer services, including its Messenger services, in January last year after authorities raised security concerns, but said it drew the line at monitoring its enterprise email.
The Indian government claims that encrypted BlackBerry services could be used to foster unrest or allow militants to organize or carry out attacks. Companies who use the service fear their data could be sold on to rivals or given as a favour by corrupt government officials. It could also be used by the Indian government to steal business secrets for local companies.
David Paterson, RIM's head of government relations, said he is positive that the Indian government recognises encryption is fundamental to attracting and maintaining international business in the country.