Bingo! That's the only good explanation on why this is coming up. India has tonnes of expertise and they for sure know how the blackberry architecture works. The Indian government is just trying to cut RIM out of the loop so telecom companies can get a bigger slice of the pie. And if they can't give the servers to the telecom companies, at lease they'll get RIM to open a datacenter in India and hire lots of their workers.
Blackberry has been available in India for the last 3 years without the government or DOT raising a single issue about terrorists.
Its just when Tata Teleservices offered to provide the service that this suddenly became a 'terrorism' issue. Airtel and Hutch now Vodaphone have been providing blackberry since 2004.
This is not about terrorism but corporate politics and influence peddling which is the way of business in India. RIM just has to pay some money to the right people and this will die a natural death or ask Airtel/Vodaphone to stop their lobbying against Tata Tele.
Terrorism is fast becoming a favoured excuse and people should be a tad more skeptical before jumping to conclusions about threats that may not exist. Terrorists have many ways of communicating without resorting to blackberry. You can't stop technology because it can be abused.