New Delhi: A dream project of the government, the ‘world’s cheapest tablet PC’, Aakash, is being produced at less than $35 (approximately 1,750) per unit, but the replacement warranty attached to it has led to an increase in its price by about $14 to $49.98 per piece.

“The government has asked for a special replacement warranty. Government has asked us not to repair it (Aakash Tablet). You will have to replace it… which is a big cost," Suneet Singh Tuli, the chief executive officer (CEO) of Datawind, the company manufacturing the tablet, told the news agency.

A student poses with the supercheap Aakash tablet computer which she received during its launch in New Delhi. Photo: AP

On 22 July 2010, human resource development (HRD) minister Kapil Sibal had unveiled a prototype of the device and announced that it would be developed for use at around $35 per unit.

To ensure complete transparency and a level playing-field, the National Mission on Education through Information and Communication Technology (NME-ICT) decided to task IIT Rajasthan, Jodhpur, with the job of procuring and testing these devices, based on the design and specifications that the mission’s team had finalized.

IIT Jodhpur had floated tenders and the lowest bidder quoted an ex-factory price of $37.98, which was close to the cost mentioned by the minister.

This cost comprised components and material, as well as manufacturing expenses. The final landed price of $49.98 (Rs 2,276) per unit included taxes, levies, and charges like freight and insurance, servicing and documentation, etc.

Tuli said people have been challenging the development of such a low cost device, but by selling this device to the government, Datawind is making enough profits, which even allows him to donate 10% of the total profit to charity.

Tuli said that over-and-above the production cost, Datawind pays almost 20% as taxes, which add to the cost of the device.

“If we bring it after making in China, then there would have been no issues, because it’s exempted from duties. I would have not been required to pay 4% VAT (value added tax). Getting it from China and selling in India would have not made it exciting. Therefore, we made it at Hyderabad," Tuli said.