Ringing Bells will import the first 50 lakh units of its handset, a government official said following a meeting with the company's promoter. The firm had earlier claimed that making devices in India would help it sell a smartphone for as little as Rs. 251.

The company, which claims to have received more than 6 crore registrations for its Freedom 251 phone, has promised delivery of 50 lakh handsets by June 30. Of this 25 lakh will be online orders and 25 lakh would be those received offline.

In a meeting with Department of Electronics and IT (DeitY) officials following a summons, Ringing Bells President Ashok Chaddha and Promoter Mohit Goel on Monday “explained their business model”. This follows instructions from the Communications and IT Minister to examine the “veracity" of the venture.

According to a senior ministry official, Mr. Chaddha and Mr. Goel stated that initially they plan to import 50 lakh handsets to meet the demand and will then start manufacturing in India in a phased manner.

When contacted a company spokesperson said the company is presently importing components from Taiwan and will be assembling them at a pilot facility in Noida, UP. The company plans to set up at least two manufacturing plants in the next 6-8 months with an initial investment of Rs.350 crore.

As per reports, Mr.Chaddha had earlier said the company would benefit from economies of scale and would save on the 13.8 per cent duty by going for Made in India components.

The ministry official said, during the meeting, the company confirmed that they have received payment for 30,000 handsets which has been parked in an escrow account.

Ringing Bells had earlier said the amount (over Rs.75 lakh for 30,000 devices) has been deposited with the payment gateway as per guidelines and the company will claim payment only after submission of delivery proof.