An Indian handset maker is ready to launch the country's cheapest smartphone under Rs 500 ($7), which could be a game changer in one of the world's fastest growing smartphone markets. Called Freedom 251, it has been manufactured by a homegrown company, Ringing Bells.

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With 220 million users, India is the world's second-largest smartphone market. Since less than one-third of the population uses smartphones, it continues to attract new smartphone brands.

The company plans to import the components but assemble the phones in India, in accordance with the Indian government's Make in India campaign, which encourages local manufacturing. In the last year, global smartphone makers such as Motorola, Gionee, Lenovo and Xiaomi have started assembling their handsets in India.

Currently, the most affordable smartphones in India are priced between Rs 1,500 ($22) and Rs 2,000 ($29). Last year, another Indian company DataWind announced its plans to launch the world's cheapest smartphone at Rs 999 ($14.6).

While Ringing Bells has not revealed too many details about Freedom 251, it is likely to be 3G-enabled. The company had recently launched the country's cheapest 4G smartphone priced at Rs 2,999 ($44).