DataWind, the Canada-based manufacturer, said the government was buying 100 000 of the tablets at 2 276 rupees (US$46) each to be given away for free to university and college students. The price of what has been dubbed "the world's cheapest computer" should fall to $35 and could even be hammered down as low as $10, DataWind said at the launch in New Delhi.
The computer has a seven-inch (18cm) touchscreen, Wi-Fi Internet function, a multimedia player and 180 minutes of battery power.
Called the "Aakash" ("Sky"), the stylish, locally-made device uses an Android 2.2 operating system and has an external 2GB storage card and two USB ports.
"Our goal was to break the price barrier for computing and Internet access," DataWind CEO Suneet Singh Tuli said. "We've created a product that will finally bring affordable computing and Internet access to the masses."
"It (US$35) is a viable number, on our way to US$10 also. Maybe not today but in time. That's the goal," he added.
The release of the Aakash has been hailed a major success for India, which is also famous for the Tata Nano - the world's cheapest car, priced at about US$2 500.
But experts warned the tablet device might struggle to live up to expectations with its limited 256-megabyte random access memory (RAM). The computers will at first be distributed through universities and colleges rather than sold at shops, and the long-term marketing strategy remains unclear.
Commercial manufacturers are hoping Indian customers will leapfrog personal computers to buy tablets, as millions did by buying mobile telephones instead of waiting for a landline.
Apple's internationally-popular iPad computers costs a minimum of US$600 in India, with competitor Reliance Communications selling a rival tablet device at about US$290.
The Aakash is part of a push to increase the number of students in higher education and to give them the technological skills needed to further boost the country's recent rapid economic growth. India, where the 61% literacy rate lags far behind many other developing nations such as China with 92%, is making major efforts to improve its education system.
"When these devices are actually used by students across India we will then get valuable feedback," said Human Resource Development Minister Kapil Sibal at the launch event, where 500 students received the first models.
"This is the beginning of a journey," he said, adding that 700 Aakashs are made daily and production would have to be increased rapidly.
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