India has crossed 100 Internet Shutdowns in 2018, but very little is discussed about how they affect daily lives. MediaNama is publishing a series on the impact that Internet Shutdowns have on people’s lives. These were originally published by the Centre for Internet & Society, and written by reporters working with, in a report which was released on May 17th 2018. This post has been slightly edited to reflect updated statistics.


By Binita Parikh

An internet shutdown means breaking contact with the lifeline of the stock market: information about share price movement. “The entire momentum for trading and investing comes from the control the trader feels he has on information about share prices,” says Minesh Modi, a trader based in Ahmedabad. “The internet puts information on our fingertips, so the trader could play on the stock exchange. It gives you a sense of control on the data, and is also mechanism to trade.”

So, when the Gujarat government shut the internet down for a week during the Patel agitation in September 2015, and for four hours to prevent cheating on phones during a Revenue Accountants Recruitment Exam in February 2016, Modi says, “That intense feeling of connect goes away, and the faith is shaken.”

An obvious fallout of mobile internet shutdown is that terminals connected via phone internet stop working, and mobile trade is not possible. However, many Gujarati investors say that while they check price variations and movements online, they still trade through brokerage houses. Playing the stock market is usually a part-time business activity for most Gujaratis. “I don’t trade online directly. I place actual orders of purchase/sell through my broker,” says YK Gupta, an investor in the city. Still, he did struggle during the internet shutdown. “I couldn’t keep a tab on the price movement, and had to call up my broker for updates. How many times can I take updates on the phone? The television gives prices of only a few stocks, and there is a delay of three to five minutes of prices on the television. Stock prices being as volatile as they are, that time gap can be life-changing in the stock market.” Not willing to risk a huge mistake, Gupta chose to stay away from making any stock transactions during internet shut down.

The stock market rides on people’s aspirations and individual deductions about trends and data, which in turn impacts business valuations. Since internet penetration has increased, traders say there is a premium on speedy reaction as well. Anil Shah, a former director with the Bombay Stock Exchange (2011-14) and a member of the National Stock Exchange, believes that an internet shutdown, however partial, will paralyse the ecosystem that sustains the share market. “Most of our work is on the terminals and when they stop, the smooth flow gets disrupted. The information that is the base in the stock market, the actual trading and fund flow work, all this will stop. When the internet stops, data stops, and the flow of work stops. It’s as simple as that,” he says.

Recalling the impact of the internet and how it has evolved and woven itself into the stock market ecosystem, Shah adds, “Earlier, when the telephone number was the basis of trading, we could establish connectivity via phones. But since 2006-7, we have slowly moved to the internet to establish interconnectivity. The more reliable, faster and cheaper the internet services got, the more it integrated itself into our trading patterns. More people shifted to it as a connecting platform. About 95% connections are now established online.”

He says that NSE/BSE members now have a dedicated lease line so that they don’t lose contact with the stock market. “Many brokerage firms are connected via VSAT linkages, so that we, as Gujarat state, don’t get disconnected fully with the rest of India. The loss due to internet shutdown is not quantifiable. It will have to be measured as the cost of a missed opportunity.”

It is not just the stocks, but also banking transactions that stop or decrease drastically in volume when the internet stops, Shah says. “During the Patidar agitation, mobile internet services in most areas were shut down. However, broadband services were not stopped, so the brokers managed to keep the ball rolling. But brokers will lose in volumes. It is difficult to put a figure to it, but the movement and momentum of trade goes down.”

Echoing a similar sentiment, VK Sharma, head of Public Consulting Group and Capital Market Strategy at HDFC Securities, says that large companies have the facility to call their other branch offices and get the transactions through. So only customers and traders who don’t have a landline fallback option will be affected. However, those who wish to transact on the stock market with help of mobiles will not be able to do so. “This way, the volume of transactions is not stopped completely, but definitely curtailed,” Sharma says. “The decrease can be roughly estimated to be around 3%, but the state-wise breakdown of transactions and impact is not available from the exchange. Moreover, internet slowdown or shutdown results in a lot of disputes among traders and brokers – about the price entered into for transaction and the price that the deal is finalised on.”

Sarit Choksi, an investor who trades regularly, lamented the absence of a recovery mechanism for the losses that the people incurred. “When the net shuts off, we have to call the broker, who does not have dedicated phone lines to handle the huge hike in calls, so getting through to him is itself a challenge,” he says. “Then, as we don’t have the information at our fingertips, we cannot adjust the mutual funds choice, ‘stop loss’ and set ‘buy or sell’ limits in tune with the market movement. By the time I see it on TV, and get through to the broker to execute the deal, the price has changed. Who is going to compensate for this loss?”

It’s impractical to tell the Stock Exchange Bureau of India or the traders that the transactions could not go through due to internet shutdown, or ask them to forgive the price difference due to the long waiting time on the telephone. If brokerage houses makes a mistake, Choksi explains, arbitration is available, but there is no platform to claim or address the kind of losses one incurs due to external limitations like an internet ban.

“If internet connectivity is put on ransom due to political ambitions, it is very disruptive,” Choksi says. “In a society deliberately being pushed to go digital, the impact of such a shutdown is felt in financial and social sectors. When such political decisions are taken without considering the other impacts, our bread and butter is affected, and we are left high and dry, with no recourse or means to compensate the loss.”


Binita Parikh is a Ahmedabad – based freelance writer and a member of, a pan-India network of grassroots reporters.

Cross-posted here with permission under the CC BY-ND 4.0 license. Photographs captured and retrieved by 101Reporters.