Both, proxy server and virtual private network (VPN), can be useful to protect your online privacy because both hide your IP address by rerouting your internet traffic through a remote server. But there are big differences. See below diagrams.
Differences between Proxy & VPN
Unlike a VPN, a proxy doesn’t encrypt your data. So, proxy isn’t not very secure compare to VPN. VPN is slower because of the encryption, while proxy server is faster since it doesn’t not encrypt the traffic. A VPN provider needs more permissions on the local device than a simple web proxy and as a result usually requires users to install a separate app.
VPN vs Proxy in India
“Are Proxy Server Service Providers getting more ease of doing business than Virtual Private Network (VPN) Service Providers in India?”
As per the Directions issued by CERT-In (Indian Computer Emergency Response Team) on April 2022; Data Centres, Virtual Private Server (VPS) Providers (web hosting), Cloud Service Providers and Virtual Private Network (VPN) Service Providers will be required to maintain logs including names of customers, their IP addresses etc. for a period of 5 years or longer duration. Since then, this mandate has raised privacy concerns and it has also been criticised by major VPN providers such as SurfShark, NordVPN, and ExpressVPN, etc. The direction is being challenged in the Delhi High Court, and the government has argued that absolute anonymity online is unacceptable. Several major VPN providers have removed their India servers citing a threat to the anonymity and privacy of users.
But in that clause, Proxy Server Services Providers aren’t mentioned. I have no clue why they are left out from this particular clause or no depth knowledge regarding policy making thought process. I am unsure if other directions or guidelines or rules are for them on this matter. Of course, proxy being an intermediary, they have to maintain logs for a rolling period of 180 days as per other clause of same directions. However, they are excluded from maintaining logs for 5 years (less storage, less financial burden) and preserving user requests (less customers detail requests, less privacy concerns) like VPN Service Providers. At first glance, it looks like Proxy Service Providers have lesser compliance risk than VPN Service Providers in India.
CERT-In Directions April 2022