The Indian Cellular Association (ICA) also said that it is not appropriate for the senior political and government leadership to be present at the launch till the air around this is cleared and it is not shrouded under controversies.

Noida-based Ringing Bells is launching India's most affordable smartphone, priced at Rs 251, a move that is set to disrupt the booming Indian mobile handset market.

The 3G handset, Freedom 251, features a 4-inch display, Qualcomm 1.3-GHz quad-core processor and 1 GB RAM, according to details shared by the company.

"For your kind information, the bill of material (BOM) value for a product like this when sourced from the cheapest supply chain cost approximately USD 40 (Rs 2,700).

"And this, when translated into retail price after addition of applicable duties, taxes and with distribution and retail margins would be at least Rs 4,100 while the product is being sold at Rs 251," ICA National President Pankaj Mohindroo said in the letter.

He further said that even if the product is sold at lower margins in an e-commerce type subsidised sale, the final consumer price cannot come below USD 52-55 (about Rs 3,500-3,800).

Read more: 3G smartphone with quad-core processor launched at Rs 251