The US Department of Commerce has determined that producers and exporters of hard empty capsules from India received countervailable subsidies. This decision could result in the imposition of countervailing duties on Indian exports, pending a separate injury ruling by the US International Trade Commission (ITC).
The investigation, covering the period from April 1, 2023, through March 31, 2024, concluded that subsidies provided to Indian manufacturers met the legal standards for countervailing duties under US trade law. A net countervailable subsidy rate of 7.06 percent ad valorem was established for ACG Associated Capsules Private Limited and its affiliates, as well as for all other Indian producers and exporters not individually examined.
Commerce verified the subsidy information reported by ACG and its affiliates during on-site reviews conducted in July and August 2025. Changes were made to the subsidy rate calculations from the preliminary determination after reviewing verification findings and comments submitted by interested parties.
The investigation covers hard empty capsules used in pharmaceutical and nutraceutical products, regardless of polymer material, additives, size, color, or whether the cap and body are imported together or separately. Commerce had previously instructed US Customs and Border Protection to collect cash deposits and suspend liquidation of certain imports from India, a measure that remains in place for entries made on or before July 28, 2025.
Commerce will inform the ITC of its final affirmative subsidy determination, with the ITC required to decide within 45 days on the impact of imports of hard empty capsules from India on the US domestic industry. Depending on the ITC’s decision, Commerce may issue a countervailing duty order and reinstate the suspension of liquidation, requiring cash deposits at the determined rates.
Interested parties will receive disclosure of Commerce’s calculations within five days of the public announcement of the determination or within five days of publication in the Federal Register, as per US regulations.
