India has its priorities wrong, according to Google executive chairman Eric Schmidt.

In the run-up to a speech later this week at The Guardian's Big Tent Activate Summit in New Delhi, India on Thursday, Schmidt has called on the Indian government to regroup and refocus on Web innovation rather than Web surveillance.

Schmidt, who is currently touring the Asia region, penned a piece in The Times of India describing how the country's government has two options ahead of a burgeoning Internet-connected population: either an "open Internet that benefits all," or a "highly regulated one that inhibits innovation."

For more than two years, India has invested heavily in policing its share of the Internet and forcing companies to open their networks in a bid to stifle its growing problem with terrorism and serious financial and economic crime.

For outsiders looking in, it's clear that India's surveillance net is growing as it the country's political instability.

BlackBerry, for instance, was told to provide encryption keys to the state intelligence services to allow the country's authorities to snoop on secure and encrypted emails. India also ordered the interception of about 1,300 email accounts and more than 10,000 phones during the fourth quarter last year.

India has, for many years, suffered with terrorism and major crime as a result of a number of political factors at play, particularly in relation to the disputed Kashmir districts and religious conflicts. 

But Schmidt believes that instead of the country's invested interests in policing the Web, cultural barriers should be lowered by fostering innovation and education policies in spite of ongoing problems. "Where there is a free and open Web, where there is unbridled technological progress, where information can be disseminated and consumed freely, society flourishes," he said.

"Only about two billion of the world's seven billion people have an Internet connection, and I believe the remaining five billion will get one in the next decade. Almost one billion of them will come online in India," he says. But while big business are already holding the fort, much of the country's cultural enrichment will come from Web startups and small businesses.

If India plays its cards right, we'll soon see Indian engineers and Indian small businesses tackling Indian problems first, then exporting the solutions that work best."

But, Schmidt warns: "In all the places I've travelled to, I've yet to see a country whose situation worsened with the arrival of the Internet."

Schmidt's bottom line is that while India begins to hone in on investments in Internet connectivity and bringing the country's booming startup and small business population to the high-speed Web, does India want to focus on a closed network or an open one?

The Google executive's kicker line comes only a few weeks after he visited North Korea. While the country's 3G network offers unrestricted access, residents cannot use it. 

He said in early January during his time in the nuclear-empowered rogue state to officials that Internet access restrictions against its own citizens will lead to the country's further isolation and economic destruction.

"If people in power are overly pessimistic about the Internet, their pessimism will be self-fulfilling. In seeking to control all of it — including the good parts that are working well — they'll stop good Indians from doing great things. Instead, they should focus on giving every Indian the best shot at using the Internet to make his or her country even better."