India to Monitor Google and Skype - WSJ.com. As an extension of their policy of pushing for access to encrypted communications on RIM BlackBerry devices, they are now demanding access to data from both Google and Skype. India is demanding that Skype and Google install servers within India so the government can access the information on Indian users.
Obviously bad guys can trivially bypass this through the use of VPNs and by taking care to use servers located outside of India. The real impact will be to open all legitimate Internet users to universal surveillance.