Guidelines for the Protection of National Critical Information Infrastructure: How Much Regulation?

Yet the National Cyber Security Policy, taken together with what little is known of the as-yet restricted guidelines for CII protection, raises troubling questions, particularly regarding the regulation of cyber security practices in the private sector. Whereas the current Policy suggests the imposition of certain preferential acquisition policies, India would be best advised to maintain technology neutrality to ensure maximum security.

According to Section 70(1) of the Information Technology Act, Critical Information Infrastructure (CII) is defined as a “computer resource, the incapacitation or destruction of which, shall have debilitating impact on national security, economy, public health or safety.” In one of the 2008 amendments to the IT Act, the Central Government granted itself the authority to “prescribe the information security practices and procedures for such protected system[s].” These two paragraphs form the legal basis for the regulation of cyber security within the private sector.

Such basis notwithstanding, private cyber security remains almost completely unregulated. According to the Intermediary Guidelines [pdf], intermediaries are required to report cyber security incidents to India’s national-level computer emergency response team (CERT-In). Other than this relatively small stipulation, the only regulation in place for CII exists at the sector level. Last year the Reserve Bank of India mandated that each bank in India appoint a chief information officer (CIO) and a steering committee on information security. The finance sector is also the only sector of the four designated “critical” by the Department of Electronics and Information Technology (DEIT) Cyber Security Strategy to have established a sector-level CERT, which released a set of non-compulsory guidelines [pdf] for information security governance in late 201

The new guidelines for CII protection seek to reorganize the government’s approach to CII. According to a Times of India article on the new guidelines, the NTRO will outline a total of eight sectors (including energy, aviation, telecom and National Stock Exchange) of CII and then “monitor if they are following the guidelines.” Such language, though vague and certainly unsubstantiated, suggests the NTRO may ultimately be responsible for enforcing the “[mandated] security practices related to the design, acquisition, development, use and operation of information resources” described in the Cyber Security Policy. If so, operators of systems deemed critical by the NTRO or by other authorized government agencies may soon be subject to cyber security regulation—with teeth.

To be sure, some degree of cyber security regulation is necessary. After all, large swaths of the country’s CII are operated by private industry, and poor security practices on the part of one operator can easily undermine the security of the rest. To quote security expert Bruce Schneier, “the externalities in cybersecurity are so great that even the freest free market would fail.” In less academic terms, networks are only as secure as their weakest links. While it is true that many larger enterprises take cyber security quite seriously, small and medium-sized businesses either lack immediate incentives to invest in security (e.g. no shareholders to answer to) or more often lack the basic resources to do so. Some form of government transfer for cyber security related investments could thus go a long way toward shoring up the country’s overall security.

Yet regulation may well extend beyond the simple “fiscal schemes and incentives” outlined in section IV of the Policy and “provide for procurement of indigenously manufactured ICT products that have security implications.” Such, at least, was the aim of the Preferential Market Access (PMA) Policy recently put on hold by the Prime Minister’s Office (PMO). Under pressure from international industry groups, the government has promised to review the PMA Policy, with the PMO indicating it may strike out clauses “regarding preference to domestic manufacturer[s] on security related products that are to be used by private sector.” If the government’s aim is indeed to ensure maximum security (rather than to grow an infant industry), it would be well advised to extend this approach to the Cyber Security Policy and the new guidelines for CII protection.

Although there is a national security argument to be made in favor of such policies—namely that imported ICT products may contain “backdoors” or other nefarious flaws—there are equally valid arguments to be made against preferential acquisition policies, at least for the private sector. First and foremost, it is unlikely that India’s nascent cyber security institutions will be able to regulate procurement in such a rapidly evolving market. Indeed, U.S. authorities have been at pains to set cyber security standards, especially in the past several years. Secondly, by mandating the procurement of indigenously manufactured products, the government may force private industry to forgo higher quality products. Absent access to source code or the ability to effectively reverse engineer imported products, buyers should make decisions based on the products’ performance records, not geo-economic considerations like country of origin. Finally, limiting procurement to a specific subset of ICT products likewise restricts the set of security vulnerabilities available to hackers. Rather than improve security, however, a smaller, more distinct set of vulnerabilities may simply make networks easier targets for the sorts of “debilitating” attacks the Policy aims to avert.

As India broaches the difficult task of regulating cyber security in the private sector, it must emphasize flexibility above all. On one hand, the government should avoid preferential acquisition policies which risk a) overwhelming limited regulatory resources, b) saddling CII operators with subpar products, and/or c) differentiating the country’s attack surface. On the other hand, the government should encourage certain performance standards through precisely the sort of “fiscal schemes and incentives” alluded to in the Cyber Security Policy. Regulation should focus on what technology does and does not do, not who made it or what rival government might have had their hands in its design. Ultimately, India should adopt a policy of technology neutrality, backed by the simple principle of trust but verify. Only then can it be truly secure.