WhatsApp cannot issue GoI — or any government, for that matter — a fait accompli over encryption. The right to privacy is by no means absolute in any system of law, and governments are well within their rights to seek with due process information for law enforcement.
There can be debate over what constitutes due process, and how to go about satisfying its requirements. In these pursuits, law and technology need to come closer on the art of the possible. But absolute positions, such as threatening to stop services if forced to dilute encryption on occasion, can end up badly.
Indian courts, unfortunately, have a long list of precedents that fetter fundamental rights. So, it would be better for everyone that things don't come to such a pass.
On the matter of what it will take for WhatsApp to comply with the requirements of law enforcement in India, it may find a more sympathetic legal view on its right to conduct business. If data storage and retrieval compliances become unsustainable, a case can be made out.
However, the new data privacy law applies to a wide range of businesses, including financial services. Social media platforms should find it difficult to make the argument for a carveout, either due to the nature of their business, or due to its scale.
The case weakens when monetisation of user data becomes a key component of the business plan of social media.
WhatsApp may find it fruitless to go freedom-shopping in a quest for absolutism. This question cannot be answered through economic negotiation, but by