DataWind, the vendor of India's low-cost Aakash tablet, said it was not under any contractual obligation to assemble the product in India.
The company's CEO Suneet Singh Tuli said in a telephone interview Tuesday that he challenged any potential competitor to deliver a similar device with warranty and accessories at its rupees 2263 ($40.7) price to the Indian government.
Tuli was reacting to newspaper reports that said DataWind had imported tablets designed and manufactured in China, and shipped them to the government.
The Aakash tablet, which is into its second version, has been touted as an Indian innovation that will bridge the digital divide in the country, starting with the education sector.
Rivals India and China have a longstanding border dispute, and the possibility that Chinese companies were involved in the tablet's manufacture is expected to be a sore point, particularly as the Indian government plans to showcase Aakash at a meeting at the United Nations on Wednesday.
The Indian government was not immediately available for comment.
Tuli said that some 10,000 units supplied to the government were imported as kits that included motherboards made to the company's specifications and capacitive touchscreens made by DataWind at its facility in Montreal and then assembled in India. "Our business model is similar to that of Apple where we use subcontract manufacturers to build our products," Tuli said in a statement over the weekend.
While he is committed to promoting the development of manufacturing capabilities in India, there was no requirement in the contract from the government to make the tablets in India, he said.
Aakash has been dogged by controversy, delays and complaints of poor performance ever since it was launched in October last year by the Indian government. The Android tablet project was hit by disputes between DataWind and a government-run educational institute over test criteria, and later a dispute with its contract manufacturer.
The company has meanwhile updated the device to the second-generation Aakash 2, which has a 7-inch capacitive multitouch screen and a single-core, 800MHz ARM Cortex-A8 processor, faster than the earlier 366MHz processor.
About 7,000 units of its first version Aakash 1 and another 13,000 units of the Aakash 2 have been delivered to the government, Tuli said. The delivery of the rest of the 100,000 units of the government order is to be completed by December. "We may ask for some extra time," Tuli said.
DataWind has also been selling the devices directly to Indian consumers under the UbiSlate brand. Over 300,000 devices have already been shipped, with some orders pending, Tuli said. Some of the devices supplied to consumers were fully assembled in China, he added.
The company has set up an assembly facility in India besides contracting to local manufacturers, Tuli said. The company will also be making the touchscreens in India at a facility that is expected to be running by December. It has taken time for the manufacturing ecosystem to develop, he added.