Make in India costs more than made in China: Aakash tablet maker


Questioning the feasibility of Freedom 251, Datawind CEO Suneet Singh Tuli trashed the explanation given by Noida-based startup Ringing Bells that domestic manufacturing have allowed them to offer the world’s cheapest smartphone for just Rs 251 or less than $4.

“Firstly, make in India is actually assemble in India. While local assembling is the first step towards local manufacturing, it is impossible to have such a huge impact on the bill of materials,” Tuli said.

Ringing Bells president Ashok Chadha in an interview with The Times of India said that the company would not only sell the smartphone for Rs 251 but also make a profit of Rs 31 from each unit. Chadha primarily stressed that “economies of scale, domestic manufacturing and online sales without much marketing expenses” is allowing them to deliver the world’s cheapest smartphone.

It is questionable as to what impact does online sales and marketing have on the actual cost of components or the total bill of materials.

During the launch, Chadha while justifying the price of Freedom 251 said, “The cost of making one unit of the smartphone is around Rs 2,000. By making in India, this price goes down by Rs 400. Then we will sell online only. So, this pulls down the price by Rs 400 further. We are sure that this smartphone will be in a lot of demand. We are assuming to save around Rs 500 from this economy of scale. At last, we wait for our platform to grow, so, that we can make money from other services.”

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