Hackers targeted India’s power grid near Ladakh over last 8 months in major cyber attack from China

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India continues to be a major target of Chinese cyber espionage activity. Although tensions reduced, aided by partial troop disengagement following prolonged border stand-offs in the Ladakh region, there has been limited progress between the bilateral relations of the two countries. 

A new report by the threat intelligence firm Recorded Future was published on Wednesday. The report claimed suspected state-sponsored Chinese hackers targeted the power sector in India in recent months as part of an apparent cyber-espionage campaign. 

RK Singh, Union Minister for Power and New & Renewable Energy said "two attempts by Chinese hackers were made to target electricity distribution centres near Ladakh but were not successful... We've already strengthened our defence system to counter such cyber attacks." 

The hackers targeted at least seven Load Despatch Centres (SLDCs) in northern India responsible for carrying out real-time operations for grid control and electricity dispatch in the areas they are situated in, near the disputed India-China border in Ladakh, the report notes. 

This latest set of intrusions, however, is composed of an almost entirely different set of victim organizations. In addition to the targeting of power grid assets, the report also identified the compromise of a national emergency response system and the Indian subsidiary of a multinational logistics company by the same threat activity group. To achieve this, the group likely compromised and co-opted internet-facing DVR/IP camera devices for command and control of Shadowpad malware infections, as well as use of the open source tool FastReverseProxy (FRP).

"ShadowPad continues to be employed by an ever–increasing number of People’s Liberation Army (PLA) and Ministry of State Security (MSS)-linked groups, with its origins linked to known MSS contractors first using the tool in their own operations and later likely acting as a digital quartermaster," the Recorded Future group said. 

The report added, "In February 2021, we reported on intrusion activity targeting operational assets within India’s power grid that we attributed to a likely Chinese state-sponsored threat activity group we track as RedEcho. Following a short lull after the publication of our RedEcho reporting, we have detected ongoing targeting of Indian power grid organizations by China-linked adversaries, frequently using the privately shared modular backdoor ShadowPad."

Notably, this targeting has been geographically concentrated, with the identified SLDCs located in North India, in proximity to the disputed India-China border in Ladakh. One of these SLDCs was also targeted in previous RedEcho activity. 

Key points in the report 

• Given the continued targeting of State and Regional Load Despatch Centres in India over the past 18 months, first from RedEcho and now in this latest TAG-38 activity, this targeting is likely a long-term strategic priority for select Chinese state-sponsored threat actors active within India.
• The prolonged targeting of Indian power grid assets by Chinese state-linked groups offers limited economic espionage or traditional intelligence-gathering opportunities. This targeting is instead likely intended to enable information gathering surrounding critical infrastructure systems or is pre-positioning for future activity.
• The objective for intrusions may include gaining an increased understanding into these complex systems in order to facilitate capability development for future use or gaining sufficient access across the system in preparation for future contingency operations.

Our February 2021 RedEcho report highlighted the compromise of 10 distinct Indian power sector organizations, including 4 of the 5 of the country’s Regional Load Despatch Centres (RLDC), 2 ports, a large generation operator, and other operational assets. These assets offer minimal value as economic espionage or other traditional intelligence targets, which led us to assess a likely goal of pre-positioning network access to support Chinese strategic objectives. 

Following that February 2021 report, the report revealed the group abandoned the operational infrastructure highlighted and shift its infrastructure modus operandi. Despite this, evidence of targeting of Indian power assets and organizations with links to critical infrastructure from Chinese state-sponsored actors continued. This included the targeting of an Indian managed service provider (MSP) and operational technology (OT) vendor using ShadowPad, which aligns with activity described in recent Dragos reporting. 

The use of ShadowPad across Chinese activity groups continues to grow over time, with new clusters of activity regularly identified using the backdoor as well as continued adoption by previously tracked clusters. At this time, we track at least 10 distinct activity groups with access to ShadowPad, which is assessed to have likely been originally developed and used by MSS-linked contractors linked to the APT41 (BARIUM) intrusion set.