An Idea Promised the Sky, but India Is Still Waiting

Christinne Muschi for The New York Times

A prototype tablet is assembled at a DataWind site in Montreal. The company's plan to invigorate India's electronics manufacturing by producing low-cost tablets for students has gone awry.

NEW DELHI

DataWind planned to make Aakash-2 tablets not at its own site, above, but in India.

THE idea was, and still is, captivating: in 2011, the Indian government and two Indian-born tech entrepreneurs unveiled a $50 tablet computer, to be built in India with Google's free Android software. The government would buy the computers by the millions and give them to its schoolchildren.

Enthusiasts saw the plan as a way to bring modern touch-screen computing to some of the world's poorest people while seeding a technology manufacturing industry in India. Legions of customers placed advance orders for a commercial version of the tablet, thrilled at the prospect of owning tangible proof that India was a leader in “frugal innovation.”

Even the secretary general of the United Nations, Ban Ki-moon, lavished praise on the audacious project, called Aakash, the Hindi word for sky. “India is a superpower on the information superhighway,” Mr. Ki-moon said at a ceremony in November at the United Nations headquarters in New York.

Stoking expectations was Suneet Singh Tuli, the charismatic C.E.O. of the small London-based company that won the bid. “I am creating a product at a lower price than anyone else in the world with the hope that it impacts people's lives and I make money out of it,” he said in a recent interview.

But over the last few months, it has become increasingly evident that Mr. Tuli, 44, and his older brother, Raja Singh Tuli, 46, are unable to deliver on most of their ambitious promises.

The Tulis acknowledge that their company, DataWind, will not even come close to shipping the 100,000 tablets it has promised to India's colleges and universities before its year-end deadline. Most of the 10,000 or so tablets delivered through early December were made in China, despite the company's early pledge to manufacture in India. Financial statements filed with British regulators show that the company is deeply in the red.

And the project's entire premise - that India can make a cheap tablet computer that will somehow make up for failures of the country's crippled education system - is fundamentally flawed, according to some experts in education and manufacturing.

Leigh L. Linden, an assistant professor of economics and public affairs at the University of Texas at Austin who has studied the use of technology in schools in India and other developing countries, said that, at best, computers merely match the performance gains from far less costly projects that involve hiring additional teachers or teaching assistants. And in some cases, Professor Linden said, the introduction of computers can actually lower students' test results.

“Based on the available research,” he said, “this would not be the most effective strategy for education in developing countries.”

The notion that India's weak manufacturing sector can catch up to China in advanced computer hardware also strikes some experts as far-fetched. “China became the manufacturing center of the world, and India missed that boat,” said Surjit S. Bhalla, an economist and managing director of Oxus Investments.

So far, the Indian government is standing firmly behind the project.

“All pathbreaking ideas do look too ambitious when conceived,” the Ministry of Human Resource Development, which oversees the Aakash project, said in an e-mailed statement. Aakash is “an all-encompassing project,” not just the creation of a tablet computer, the ministry said. With it, the government plans to create “an entire manufacturing ecosystem” in India.

INTERVIEWS with DataWind executives, government officials, Chinese manufacturers, business partners and former and current employees paint a picture of a small family company that was overwhelmed by a complex project that even China's cutthroat technology manufacturers would find challenging to execute at the price expected by the government.

Leading a tour last month of the company's small touch-screen factory in downtown Montreal, Raja Tuli, DataWind's co-chairman and chief technology officer, said he had initially opposed his brother's desire to bid on the Aakash contract, and he expressed lingering regrets.

“We got stuck in it,” he said. “We're doing our best.”

DataWind's real goal, Mr. Tuli said, is to sell low-cost wireless Internet access for tablets in developing countries like India. He said DataWind's proprietary data compression technology, which made its debut in Britain years ago with a device called the PocketSurfer, efficiently delivers Web pages over older, slower cellphone networks.

Pamposh Raina reported from New Delhi and Amritsar, India, Ian Austen from Montreal and Heather Timmons from New Delhi. Mia Li contributed reporting from Beijing.

A version of this article appeared in print on December 30, 2012, on page BU1 of the New York edition with the headline: An Idea Promised the Sky, but India Is Still Waiting.