Shares of Research In Motion Ltd. fell Monday amid uncertainty about future sales in India, given demands by authorities there to intercept traffic on its BlackBerry smartphone, and reports of tepid demand for its latest product.

RIM shares closed at $53.02, down $2.57 or 4.6 per cent, on the Toronto Stock Exchange.

RIM 3-month chart

Bloomberg quoted two Indian government officials as saying that RIM, based in Waterloo, Ont., had agreed to allow some access to its instant messaging service. The report did not name the sources.

Research In Motion could not be reached for comment Monday but has repeatedly said it would not compromise users' privacy.

RIM shares have lost about 10 per cent of their value over the past month after several governments expressed concern about access to traffic on RIM's smartphones.

Saudi Arabia and the United Arab Emirates have threatened to shut down some BlackBerry services, while Lebanon and Indonesia have said they're considering similar moves but have no firm plans.

Their concerns centre on national security, since traffic over BlackBerry's instant message service is extremely difficult to intercept and monitor.

Emerging markets critical for growth

Emerging markets are essential to RIM's growth. Analyst Kevin Restivo said the smartphone market in the Middle East and Africa is expected to grow 62 per cent this year, compared with 2009.

"It's a good opportunity for RIM, given the younger market there," said Restivo, senior research analyst with IDC's mobile phone tracker unit.

RIM shares may also have sold off on reports of weak sales of its new Torch smartphone.

Jim Suva of Citigroup suggested that after its first weekend of sales, the phone did not attract strong demand.

With files from The Canadian Press