India cuts touchscreen prices in contest with US

If the government can find a manufacturer, the Linux operating system-based machine would be the latest in a string of "world's cheapest" innovations to hit the market out of India, home to the 100,000 rupee or 1,400 compact Nano car, the 10 water purifier and 1,300 open-heart surgery.

The tablet, which could be in production next year, can be used for functions such as word processing, web browsing and video-conferencing. It has a solar power option too – important for India's energy-starved hinterlands – although that add-on costs extra.

"This is our answer to MIT's $100 computer," said Human Resource Development Minister Kapil Sibal.

In 2005, Nicholas Negroponte – co-founder of the Massachusetts Institute of Technology's Media Lab – unveiled a prototype of a $100 laptop for children in the developing world.

India rejected that as too expensive and began developing a cheaper option.

Negroponte's laptop ended up costing about $200, but in May his non-profit association, One Laptop Per Child, said it plans to launch a basic tablet computer for $99 dollars or 64.

Mr Sibal turned to students and professors at India's elite technical universities to develop the computer after receiving a "lukewarm" response from private sector players. He hopes to get the cost down to $10 or 6.50 eventually.

A ministry spokeswoman said falling hardware costs and intelligent design make the price tag plausible. The tablet does not have a hard disk, but instead uses a memory card, like a mobile phone. The tablet design cuts hardware costs, and the use of open-source software also saves more.

India plans to subsidise the cost of the tablet for its students, bringing the purchase price down to about $20 or 13.

The project is part of an ambitious education technology initiative, which also aims to bring broadband connectivity to India's 25,000 colleges and 504 universities and make study materials available online.