Telecoms minister Kapil Sibal told a press conference he had met with the companies' representatives several times over the past three months, most recently on Monday, but no agreement has been reached.
The minister wants to ensure that "insulting material" never gets uploaded, he said. He wants internet companies to "give us the data, where these images are being uploaded and who is doing it."
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Sibal denies censorship, arguing that the government is trying to avoid religious tensions that might be stirred up by controversial pictures and statements on social media sites.
The internet companies told Sibal they worked to US norms, NDTV reported. The minister called for them to adapt instead to local standards:
"We have to take care of the sensibilities of our people [...] Our cultural ethos is very important to us."
Referring to India's history of inter-religious violence, Sibal cited a picture of pigs running through Mecca as an example of potentially inflammatory content
He also produced modified images showing Prime Minister Manmohan Singh and ruling party leader Sonia Gandhi in unflattering positions, leading some to suggest that the government's main concern is to block criticism of its ruling elites.
A source told the Associated Press that the demand was prompted by Facebook pages critical of Sonia Gandhi. At a meeting with internet companies in October, Sibal said such pages were "unacceptable," executives present told the New York Times.
As Jason Overdorf, GlobalPost's correspondent in New Delhi, points out, the emphasis is heavily on criticism of ruling party members: "Do only Congress Party politicians get hammered on the web?"
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The government's request has so far fallen on "deaf ears," Sibal said, warning that if internet companies refuse to cooperate "it is the duty of the government to think of steps that we need."
Facebook issued a statement saying it recognized Delhi's concerns and would remove any content that violates its own terms, i.e. material that is "hateful, threatening, incites violence or contains nudity."
Google took a more defiant tone, saying it would remove content only if it broke either local laws or the company's terms and conditions. A local spokesperson said:
"When content is legal and does not violate our policies, we will not remove it just because it is controversial, as we believe that people's differing views, so long as they are legal, should be respected and protected."
Microsoft and Yahoo have not yet commented.
India has 100 million internet users, the third-highest total behind China and the US.
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