My backend, in Rocket (Rust), does not have compression built in. So, it is dependent on the proxy to compress it. Though nginx ingress controller supports it, I thought whether the default one had it too as it has high availability.
If it does not have, then how should I setup?
I believe nginx does not compress requests via a proxy by default.
You can change its config to enable that:
gzip_proxied any; gzip_types text/plain text/css application/json application/javascript text/xml application/xml application/xml+rss text/javascript;
Source: https://blog.percy.io/tuning-nginx-behind-google-cloud-platform-http-s-load-balancer-305982ddb340
UPDATE(2018-01-31): It looks like Cloud HTTP(S) Load Balancer supports GZIP. You just have to serve compressed content from your backend and the load balancer will pass it on.
However, NGINX is confused because of the Via header (it thinks proxies don't support GZIP, and on most cloud providers this is correct, but not Google). See this FAQ: https://cloud.google.com/cdn/docs/troubleshooting#compression-not-working
If you are using the nginx web server software, modify the nginx.conf configuration file to enable compression. The location of this file depends on where nginx is installed. In many Linux distributions, the file is stored at /etc/nginx/nginx.conf. To allow nginx compression to work with HTTP(S) load balancing, add the following two lines to the http section of nginx.conf:
gzip_proxied any; gzip_vary on;