The Centre on Monday issued a notification putting into effect a safeguard duty of 25% on import of solar cells from China and Malaysia between July 30, 2018, and July 29, 2019.

The duty reduces to 20% for six months from July 30, 2019, and further to 15% in the subsequent half year.

The decision by the government follows a long deliberation by the Directorate General of Trade Remedies, which recommended the safeguard duty structure after considering an application by Indian solar cell manufacturers. The subsequent 20% duty on “solar cells whether or not assembled in modules or panels” will apply on imports from China and Malaysia during the period July 30, 2019, to January 29, 2020, (both days inclusive), and the 15% duty will kick in during the period from January 30, 2020, to July 29, 2020 (both days inclusive).

While the move is aimed at helping the domestic solar cell manufacturing sector, it could affect existing projects dependent on cheap imports, said analysts.

Rs. 3 per unit

“The solar bid tariffs largely remained below Rs. 3 per unit in calendar year 2018 varying between Rs. 2.44 per unit and Rs. 2.75 per unit, with expectation of favourable price movement in PV modules following the policy changes in China,” Sabyasachi Majumdar, group head — corporate ratings, ICRA, wrote in a note to clients.

“The imposition of safeguard duty is likely to increase the bid tariffs to Rs. 2.9-3.1 per unit for the upcoming bids,” he wrote.

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