"We have been able to break price barrier in smartphones. Our phones are about 40 percent cheaper than other mobile phones available in India in 5-inch screen category," Datawind CEO Suneet Singh Tuli said.

The dual-sim smartphones, branded as PocketSurfer, are equipped with internet acceleration technology which helps load webpages fast even on 2G networks.

"People are shifting from feature phones to smartphones mainly to access internet easily. We are using our own acceleration technology which can download internet page in 2-3 seconds on 2G network," Tuli said.

The 2G smartphones have been priced at Rs 3,499 and Rs 4,999, while the 3G handset carries a price tag of Rs 6,499. The lowest version of PocketSurfer smartphone has Linux operating system which was earlier seen in Motorola phones. The other two phones, PocketSurfer 5 and PocketSurfer 3G5 are built on Android 4.0 platform. The 2G models of PocketSurfer have 1 Ghz processor and 3G model has 1.2 Ghz dual core processor.

The linux OS based PocketSurfer has only front VGA camera, while other two models have both front and rear cameras. The company has started online booking of phones and will provide cash-on-delivery option to customers.

"We are rolling out retail network as well. We currently have franchisee at 200 locations and we are expanding our reach. There will be 12 months warranty on phones with after sales service support at 700 locations at present," Tuli said.