Opinion is divided on the recent proposal of Director General (DG) of Safeguards to impose a provisional 70% safeguard duty on solar cell imports for a period of 200 days. While the move has raised questions over the viability of upcoming solar projects, a section of the industry holds that it would boost domestic manufacturing and create a level-playing field before the awaited surge in renewable auctions \u2013 the Centre has already announced its intention to auction another 60 GW of solar projects by FY20. But first the essentials. Imported solar modules are 8-10% cheaper than those made in India, making them vital for cheap renewable power \u2013 solar modules comprise about 60% of total project costs. About 88% of module requirements are met through imports. In FY17, imports of 88% and 7% of solar cells \u2014 the basic component of modules \u2014 took place from China and Malaysia, respectively. India\u2019s production capacity for solar cells stands at 3.2 GW and that for modules at 8.5 GW. Given the targets set by the Centre, prioritising the \u2018Make in India\u2019 policy could thus hamper the green energy mission. The proposed duty came on the back of an application for probe filed by the Indian Solar Manufacturing Association (ISMA). Dhruv Sharma, governing council member, ISMA, says the probe found that \u201caggressive dumping of solar cells and modules from China, Taiwan and Malaysia is causing significant injury to domestic manufacturers,\u201d and the duty \u201cwill trigger large investment in solar manufacturing in a short time\u201d. However, ratings agency Crisil has said that the provisional safeguard duty would put at risk about 3 GW of solar projects, worth over `12,000 crore, under implementation. A section of the industry believes the duty would cause significant financial distress to solar projects as hundreds of MW of inventory is in transit, for orders placed before the proposal was made public. It would also impact the 4,800 MW of tenders awaiting allocation. Nikunj Ghodawat, CFO, CleanMax Solar, says \u201cthe government should allow enough time for the industry to prepare itself for such a significant regulatory change.\u201d Research firm Bridge to India has estimated that a 70% safeguard duty would necessitate a hike of `0.90 per unit in solar tariff (35%) to restore pre-duty financial returns on projects. Since some tenders had been auctioned at ceiling tariffs as low as `2.93\/unit, such recovery might not be possible, it has warned.Kameswara Rao, partner, PwC, points out that the manufacturing industry in countries that export solar equipment have benefited from supportive policy over years and what the domestic industry needs is a moderate longer-term measure. Calling the move a \u201cheavy short-term measure,\u201d he says that it \u201cwill fail to make a difference if utilities refrain from signing new PPAs due to higher costs, and interest generated in the sector dissipates.\u201d Significantly, the issue has also made news in the United States, with US President Donald Trump imposing a 30% tariff on imported solar panels earlier this month. Raj Prabhu, CEO, Mercom Capital Group, holds that \u201cthe recently announced 70% preliminary safeguard duty recommendation, the ongoing anti-dumping case, and a 7.85% port duty on imported modules are creating an atmosphere of regulatory uncertainty that is taking a toll on the industry.\u201d The ball, then, is in the government\u2019s court. While Power Minister RK Singh said recently that the proposed duty would not affect projects auctioned before its implementation, removal of uncertainty on the front is clearly in the sector\u2019s interest.