Washington, Dec 26 The US Department of Commerce has issued a final affirmative determination that producers and exporters of hard empty capsules from India received countervailable subsidies, a finding that could lead to the imposition of countervailing duties on Indian exports pending a separate injury ruling by the US International Trade Commission (ITC).
In a notice published in the Federal Register and applicable from December 29, Department of Commerce said its investigation covered the period from April 1, 2023, through March 31, 2024, and concluded that subsidies provided to Indian manufacturers met the legal standards for countervailing duties under US trade law.
Commerce determined a net countervailable subsidy rate of 7.06 per cent ad valorem for ACG Associated Capsules Private Limited and its affiliates, including ACG Pam Pharma Technologies Private Limited and ACG Universal Capsules Private Limited. The same 7.06 per cent rate was applied to all other Indian producers and exporters not individually examined in the investigation.
The agency said it conducted the investigation in accordance with Section 701 of the Tariff Act of 1930 and examined whether the alleged subsidies involved a financial contribution by an authority, conferred a benefit, and were specific to certain enterprises or industries. Commerce said it verified the subsidy information reported by ACG and its affiliates during on-site reviews carried out in July and August 20252025-23827.
According to the notice, Commerce made certain changes to the subsidy rate calculations from its preliminary determination after reviewing verification findings and comments submitted by interested parties. Details of those changes are set out in a separate Issues and Decision Memorandum adopted alongside the final determination2025-23827.
Commerce also outlined the scope of the investigation, stating that it covers hard empty capsules comprised of two prefabricated cylindrical sections, commonly used in pharmaceutical and nutraceutical products. The scope applies regardless of polymer material, additives, size, color, or whether the cap and body are imported together or separately, the notice said2025-23827.
As a result of the earlier preliminary determination issued on March 31, 2025, Commerce had instructed US Customs and Border Protection to collect cash deposits and suspend liquidation of certain imports from India. Under the statute, that suspension was later discontinued for entries after July 29, 2025, but remains in place for entries made on or before July 28, 2025, pending the outcome of the ITC’s injury determination2025-23827.
Commerce said it will notify the ITC of its final affirmative subsidy determination. The ITC is required to decide within 45 days whether the US domestic industry is materially injured or threatened with material injury by reason of imports of hard empty capsules from India. If the ITC issues an affirmative injury determination, Commerce will issue a countervailing duty order and reinstate the suspension of liquidation, requiring cash deposits at the rates determined2025-23827.
If the ITC instead finds no material injury or threat of injury, the proceeding will be terminated and any cash deposits collected will be refunded or canceled, the notice said2025-23827.
Commerce added that it intends to disclose its calculations to interested parties within five days of the public announcement of the determination or, if there is no announcement, within five days of publication in the Federal Register, in line with US regulations.
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