The dual SIM-JSP20, which will sold exclusively through ecommerce firm, features 3.5-inch screen, 1 GHz processor and Android Gingerbread OS.
It also sports 128MB RAM, 256MB memory (expandable up to 32GB), 2MP camera and 1350 mAh battery.
The company aims to sell about 2 lakh units of the device, claims this is the cheapest Android-based smartphone available in the country.
"The intent was clear. We want to make available a good quality smartphone at an extremely affordable price, we are doing this on very thin margins," Jivi Mobiles CEO Pankaj Anand said at an event.
Earlier this week, another homegrown firm Intex had launched an Android KitKat powered smartphone for Rs 2,699 with Flipkart, which it claimed was the cheapest in the country.