The spokesperson said that Proton received the request from MeitY “a few days ago”. “We are currently working to resolve this situation and are investigating how we can best work together with the Indian authorities to do so. We understand the urgency of the situation and are completely clear that our services are not to be used for illegal purposes. We routinely remove users who are found to be doing so and are willing to cooperate wherever possible within international cooperation agreements,” the spokesperson said.
Although Proton Mail is end-to-end encrypted, which means the content of the emails cannot be intercepted and can only be seen by the sender and recipient if both are using Proton Mail, its privacy policy states that due to the nature of the SMTP protocol, certain email metadata — including sender and recipient email addresses, the IP address incoming messages originated from, attachment name, message subject, and message sent and received times — is available with the company.
Their hands are definitely tied in the situation, they have to comply with them to a degree to operate in the country, I'm not judging them too harshly.
But it is a pretty good reminder that at the end of the day, if you are paying a for-profit business to obfuscate and hide you from a government that has the ability to stop them, their financial incentives will be tested, and they will win out if there isn't some sort of law or regulation to protect them from this type of strong arming.