If you're a smartphone maker doing business in India, you might soon face an uncomfortable choice: hand over your source code to the government, or find another market to sell in. According to a Reuters report, India is mulling a sweeping security proposal that would require companies like Apple Inc. (AAPL) and Samsung Electronics Co. Ltd. (SSNLF) to share their closely guarded source code—the very DNA of their software.

An Unprecedented Security Overhaul

The proposal isn't just about source code disclosure. India is contemplating a package of 83 security standards that would also force smartphone manufacturers to notify the government before rolling out major software updates. It's an ambitious security overhaul, and it's happening in the world's second-largest smartphone market—a country with nearly 750 million devices in circulation.

Prime Minister Narendra Modi's administration is framing this as a necessary step to protect user data and enhance security. But here's the problem: no other country has implemented anything quite like this before. And that's making the tech industry extremely nervous.

Industry heavyweights including Apple, Samsung, Alphabet Inc.'s (GOOGL) (GOOG) Google, and Xiaomi Corp. (XIACF) have voiced serious concerns. Their worry? That these requirements could force them to expose proprietary information—the trade secrets and intellectual property that give them competitive advantages. Source code is essentially the recipe for how software works, and companies guard it fiercely for good reason.

Security Crackdown Amid Spy Concerns

This isn't India's first rodeo when it comes to tightening security measures. Just last month, the government scrapped a mandatory cyber safety app over surveillance concerns. But at the same time, it doubled down on strict security testing for cameras, driven by fears of Chinese espionage.

The timing is notable. India's proposal arrives amid a broader wave of global scrutiny targeting big tech companies. Take Apple as an example: Italy's Competition Authority slapped the company with a $115 million fine in December 2025 for allegedly abusing its dominant position in the mobile app market. The AGCM accused Apple of violating European regulations through its App Store practices, where the company maintains what regulators called "absolute dominance" over third-party developers.

Meanwhile, other tech giants appear to be catching a break in Europe. Companies like Google, Meta Platforms Inc. (META), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Microsoft Corp. (MSFT) are reportedly escaping new regulations under the EU's upcoming Digital Networks Act. This legislation represents a major overhaul of European digital and telecom rules, designed to boost competitiveness and accelerate investment in broadband and fiber infrastructure.

So what happens next? India's proposal still needs to work its way through the regulatory process, and given the pushback from major manufacturers, don't expect this to be resolved quickly. But with nearly three-quarters of a billion smartphones at stake, both the government and the tech companies have plenty of reasons to find—or fight for—a solution.