Washington, Dec 26 (NationPress) The US Department of Commerce has made a definitive ruling indicating that producers and exporters of hard empty capsules from India benefited from countervailable subsidies. This finding could potentially pave the way for the imposition of countervailing duties on Indian exports, pending a separate injury assessment by the US International Trade Commission (ITC).

In a notice released in the Federal Register, effective from December 29, the Department of Commerce stated that its investigation spanned the period from April 1, 2023, to March 31, 2024, and concluded that the subsidies provided to Indian manufacturers met the legal criteria for countervailing duties as per US trade law.

The Commerce Department revealed a net countervailable subsidy rate of 7.06 percent ad valorem for ACG Associated Capsules Private Limited and its subsidiaries, including ACG Pam Pharma Technologies Private Limited and ACG Universal Capsules Private Limited. This same rate was applied to all other Indian producers and exporters that were not individually examined during the investigation.

The investigation was conducted in compliance with Section 701 of the Tariff Act of 1930, assessing whether the alleged subsidies involved a financial contribution by a government authority, provided benefits, and were specific to certain businesses or sectors. The Department verified the subsidy details reported by ACG and its affiliates during on-site audits conducted in July and August 2025.

According to the notice, the Department of Commerce adjusted certain calculations related to subsidy rates from its preliminary findings after considering verification results and feedback from interested parties. Specifics of these adjustments are documented in a separate Issues and Decision Memorandum that accompanies the final determination.

The scope of the investigation includes hard empty capsules made up of two prefabricated cylindrical sections, typically utilized in pharmaceutical and nutraceutical products. This scope is applicable regardless of the polymer material, additives, size, color, or whether the cap and body are imported together or separately.

Following an earlier preliminary determination issued on March 31, 2025, the Department of Commerce instructed US Customs and Border Protection to collect cash deposits and suspend the liquidation of specific imports from India. According to the statute, this suspension was lifted for entries made after July 29, 2025, but it remains effective for entries made on or before July 28, 2025, pending the ITC's injury determination.

The Commerce Department will inform the ITC of its final affirmative subsidy determination. The ITC is obligated to decide within 45 days if the US domestic industry is materially harmed or threatened due to imports of hard empty capsules from India. Should the ITC issue an affirmative injury determination, the Commerce Department will implement a countervailing duty order and reinstate the suspension of liquidation, requiring cash deposits at the designated rates.

Conversely, if the ITC finds no material injury or threat of injury, the proceedings will be terminated, and any cash deposits collected will be refunded or canceled.

Furthermore, the Commerce Department intends to share its calculations with interested parties within five days of the public announcement of the determination or, if no announcement occurs, within five days of publication in the Federal Register.