Notice2025-23827
Hard Empty Capsules From India: Final Affirmative Countervailing Duty Determination
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 29, 2025
Issuing agencies
Commerce DepartmentInternational Trade Administration
Abstract
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from India. The period of investigation (POI) is April 1, 2023, through March 31, 2024.
Full Text
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<title>Federal Register, Volume 90 Issue 245 (Monday, December 29, 2025)</title>
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[Federal Register Volume 90, Number 245 (Monday, December 29, 2025)]
[Notices]
[Pages 60618-60620]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23827]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-533-935]
Hard Empty Capsules From India: Final Affirmative Countervailing
Duty Determination
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (Commerce) determines that
countervailable subsidies are being provided to producers and exporters
of hard empty capsules (capsules) from India. The period of
investigation (POI) is April 1, 2023, through March 31, 2024.
DATES: Applicable December 29, 2025.
FOR FURTHER INFORMATION CONTACT: Katherine Smith or Gorden Struck, AD/
CVD Operations, Office II, Enforcement and Compliance, International
Trade Administration, U.S. Department of Commerce, 1401 Constitution
Avenue NW, Washington, DC 20230; telephone: (202) 482-0557 or (202)
482-8151, respectively.
SUPPLEMENTARY INFORMATION:
Background
On March 31, 2025, Commerce published Preliminary Determination in
the Federal Register and invited interested parties to comment.\1\ In
the Preliminary Determination, and in accordance with section 705(a)(1)
of the Tariff Act of 1930, as amended (the Act), and 19 CFR
351.210(b)(4), Commerce aligned the final countervailing duty (CVD)
determination with the final determination in the less-than-fair-value
investigation of capsules from India.\2\
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\1\ See Hard Empty Capsules from India: Preliminary Affirmative
Countervailing Duty Determination and Alignment of Final
Determination With Final Antidumping Duty Determination, 90 FR 14237
(March 31, 2025) (Preliminary Determination), and accompanying
Preliminary Decision Memorandum (PDM).
\2\ See Preliminary Determination, 90 FR 14238.
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Due to the lapse in appropriations and Federal Government shutdown,
on November 14, 2025, Commerce tolled all deadlines in administrative
proceedings by 47 days.\3\ Additionally, due to a backlog of documents
that were electronically filed via Enforcement and Compliance's
Antidumping and Countervailing Duty Centralized Electronic Service
System (ACCESS) during the Federal Government shutdown, on November 24,
2025, Commerce tolled all deadlines in administrative proceedings by an
additional 21 days.\4\ Accordingly, the deadline for this final
determination is now December 18, 2025.
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\3\ See Memorandum, ``Deadlines Affected by the Shutdown of the
Federal Government,'' dated November 14, 2025.
\4\ See Memorandum, ``Tolling of all Case Deadlines,'' dated
November 24, 2025.
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For a complete description of the events that followed the
Preliminary Determination, see the Issues and Decision Memorandum.\5\
The Issues and Decision Memorandum is a public document and is made
available to the public via ACCESS. ACCESS is available to registered
users at <a href="https://access.trade.gov">https://access.trade.gov</a>. In addition, a complete version of
the Issues and Decision Memorandum can be accessed directly at <a href="https://access.trade.gov/public/FRNoticesListLayout.aspx">https://access.trade.gov/public/FRNoticesListLayout.aspx</a>.
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\5\ See Memorandum, ``Issues and Decision Memorandum for the
Final Affirmative Determination of the Countervailing Duty
Investigation of Hard Empty Capsules from India,'' dated
concurrently with, and hereby adopted by, this notice (Issues and
Decision Memorandum).
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Scope of the Investigation
The products covered by this investigation are hard empty capsules
from India. For a complete description of the scope of the
investigation, see Appendix I.
Scope Comments
In the Preliminary Scope Memorandum, we set aside a period of time
for parties to raise issues regarding product coverage (i.e., scope) in
scope-specific case briefs or other written comments.\6\ We received
scope case and rebuttal briefs from multiple interested parties. For a
summary of the product coverage comments and rebuttal responses
submitted to the record for this final determination, and accompanying
discussion and analysis of all comments timely received, see the Final
Scope Memorandum.\7\ In the Final Scope Memorandum, Commerce determined
that it is modifying the scope language as it appeared in the
Initiation Notice.\8\ See Appendix I.
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\6\ See Memorandum, ``Less-Than-Fair-Value Investigations of
Hard Empty Capsules from Brazil, the People's Republic of China,
India, and the Socialist Republic of Vietnam and Countervailing Duty
Investigations from Brazil, the People's Republic of China, India,
and the Socialist Republic of Vietnam: Preliminary Scope Decision
Memorandum,'' dated March 24, 2025 (Preliminary Scope Memorandum).
\7\ See Memorandum, ``Less-Than-Fair-Value and Countervailing
Duty Investigations of Hard Empty Capsules from Brazil, the People's
Republic of China, India, and the Socialist Republic of Vietnam:
Final Scope Decision Memorandum,'' dated concurrently with this
notice (Final Scope Memorandum).
\8\ See Hard Empty Capsules from Brazil, the People's Republic
of China, India, and the Socialist Republic of Vietnam: Initiation
of Countervailing Duty Investigations, 89 FR 91680 (November 20,
2024) (Initiation Notice).
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Verification
As provided in section 782(i) of the Act, in July and August 2025,
Commerce conducted verification of the subsidy information reported by
ACG Associated Capsules Private Limited (ACPL) and its affiliates, ACG
Pam Pharma Technologies Private Limited (ACG PAM) and ACG Universal
Capsules Private Limited (AUCPL) (collectively, ACG).\9\
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\9\ See Memorandum, ``Verification of the Questionnaire
Responses of ACG Associated Capsules Private Limited,'' dated August
21, 2025 (ACG Verification Report).
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Analysis of Subsidy Programs and Comments Received
The subsidy programs under investigation, and the issues raised in
[[Page 60619]]
the case and rebuttal briefs by parties in this investigation, are
discussed in the Issues and Decision Memorandum. For a list of the
issues raised by parties, and to which we responded in the Issues and
Decision Memorandum, see Appendix II.
Methodology
Commerce conducted this investigation in accordance with section
701 of the Act. For each of the subsidy programs found to be
countervailable, Commerce determines that there is a subsidy, i.e., a
financial contribution by an ``authority'' that gives rise to a benefit
to the recipient, and that the subsidy is specific.\10\ For a full
description of the methodology underlying our final determination, see
the Issues and Decision Memorandum.
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\10\ See sections 771(5)(B) and (D) of the Act regarding
financial contribution; section 771(5)(E) of the Act regarding
benefit; and section 771(5A) of the Act regarding specificity.
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Changes Since the Preliminary Determination
Based on our review and analysis of the information received during
verification and comments received from parties, for this final
determination, we made certain changes to the countervailable subsidy
rate calculations for ACG, and for all other producers/exporters. For a
discussion of these changes, see the Issues and Decision Memorandum.
All-Others Rate
Section 705(c)(5)(A) of the Act provides that in a final
determination, Commerce shall determine an estimated all-others rate
for companies not individually examined equal to the weighted average
of the estimated countervailable subsidy rates established for
exporters and producers individually examined, excluding any zero or de
minimis countervailable subsidy rates and any rates based entirely
under section 776 of the Act (facts available). If the individual
estimated countervailable subsidy rates established for all exporters
and producers individually examined are zero, de minimis, or determined
entirely under section 776 of the Act, section 705(c)(5)(A)(ii) of the
Act provides that Commerce may use any reasonable method to establish
an estimated all-others countervailable subsidy rate for exporters and
producers not individually investigated, including averaging the
weighted average countervailable subsidy rates determined for the
exporters and producers individually investigated.
In this investigation, we continue to calculate an individual total
net countervailable subsidy rate for ACG, the only individually
examined producer/exporter in this investigation, that is not zero, de
minimis, or based entirely on facts otherwise available and there are
no other countervailable subsidy rates on the record. Given these
facts, Commerce has determined that a reasonable method for
establishing the estimated all-others' countervailable subsidy rate is
to assign ACG's estimated countervailable subsidy rate to all other
producers and exporters.
Final Determination
Commerce determines that the following estimated net
countervailable subsidy rates exist for the period April 1, 2023,
through March 31, 2024:
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Subsidy rate (percent
Company ad valorem)
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ACG Associated Capsules Private Limited; ACG 7.06
Pam Pharma Technologies Private Limited; ACG
Universal Capsules Private Limited............
All Others..................................... 7.06
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Disclosure
Commerce intends to disclose its calculations performed to
interested parties in this final determination within five days of its
public announcement or, if there is no public announcement, within five
days of the date of the publication of this notice in the Federal
Register, in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
As a result of our Preliminary Determination, and pursuant to
sections 703(d)(1)(B) and (d)(2) of the Act, we instructed U.S. Customs
and Border Protection (CBP) to collect cash deposits and suspend
liquidation of entries of subject merchandise from India that were
entered, or withdrawn from warehouse, for consumption on or after March
31, 2025, the date of publication of the Preliminary Determination in
the Federal Register. In accordance with section 703(d) of the Act, we
instructed CBP to discontinue the suspension of liquidation of all
entries of subject merchandise entered or withdrawn from warehouse, on
or after July 29, 2025, but to continue the suspension of liquidation
of all entries of subject merchandise on or before July 28, 2025.
If the U.S. International Trade Commission (ITC) issues a final
affirmative injury determination, we will issue a CVD order, reinstate
the suspension of liquidation under section 706(a) of the Act, and
require a cash deposit of estimated countervailing duties for such
entries of subject merchandise in the amounts indicated above. Pursuant
to section 705(c)(2) of the Act, if the ITC determines that material
injury, or threat of material injury, does not exist, this proceeding
will be terminated, and all estimated duties deposited or securities
posted as a result of the suspension of liquidation will be refunded or
cancelled.
ITC Notification
In accordance with section 705(d) of the Act, Commerce will notify
the ITC of its final affirmative determination that countervailable
subsidies are being provided to producers and exporters of capsules
from India. As Commerce's final determination is affirmative, in
accordance with section 705(b) of the Act, the ITC will determine,
within 45 days, whether the domestic industry in the United States is
materially injured, or threated with material injury, by reason of
import of capsules from India. In addition, we are making available to
the ITC all non-privileged and non-proprietary information in our
files, provided the ITC confirms that it will not disclose such
information, either publicly or under administrative protective order
(APO), without the written consent of the Assistant Secretary for
Enforcement and Compliance.
If the ITC determines that material injury or threat of material
injury does not exist, this proceeding will be terminated and all cash
deposits will be refunded. If the ITC determines that such injury does
exist, Commerce will issue a CVD order directing CBP to assess, upon
further instruction by Commerce, countervailing duties on all imports
of the subject merchandise that are entered, or withdrawn, for
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consumption on or after the effective date of the suspension of
liquidation, as discussed above in the ``Suspension of Liquidation''
section.
Administrative Protective Order
This notice will serve as the only reminder to parties subject to
the APO of their responsibility concerning the destruction of
proprietary information disclosed under APO, in accordance with 19 CFR
351.305(a)(3). Timely written notification of the return/destruction of
APO materials or conversion to judicial protective order is hereby
requested. Failure to comply with the regulations and terms of an APO
is a violation which is subject to sanction.
Notification to Interested Parties
This determination is issued and published pursuant to sections
705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
Dated: December 18, 2025.
Christopher Abbott,
Deputy Assistant Secretary for Policy and Negotiations, performing the
non-exclusive functions and duties of the Assistant Secretary for
Enforcement and Compliance.
Appendix I
Scope of the Investigation
The merchandise subject to the scope of this investigation is
hard empty capsules, which are comprised of two prefabricated,
hollowed cylindrical sections (cap and body). The cap and body
pieces each have one closed and rounded end and one open end, and
are constructed with different or equal diameters at their open
ends.
Hard empty capsules are unfilled cylindrical shells composed of
at least 80 percent by weight of a water soluble polymer that is
considered non-toxic and appropriate for human or animal consumption
by the United States Pharmacopeia--National Formulary (USP-NF), Food
Chemical Codex (FCC), or equivalent standards. The most common
polymer materials in hard empty capsules are gelatin derived from
animal collagen (including, but not limited to, pig, cow, or fish
collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such
as opacifiers, colorants, processing aids, controlled release
agents, plasticizers, and preservatives. Hard empty capsules may
also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this
investigation regardless of polymer material, additives,
transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this
investigation regardless of their size, weight, length, diameter,
thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the
scope of this investigation regardless of whether they are imported
together or separately, and regardless of whether they are imported
in attached or detached form.
Hard empty capsules covered by the scope of this investigation
are those that disintegrate in water, simulated intestinal fluid,
simulated gastric fluid, or other similar water-based (i.e.,
aqueous) fluids within 2 hours under tests specified in Chapter 701
of the USP-NF, or equivalent disintegration tests.
Hard empty capsules are classifiable under subheadings
9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of
the United States (HTSUS). In addition, hard empty capsules may be
imported under HTSUS subheading 1905.90.9090; gelatin hard empty
capsules may be imported under HTSUS subheading 3503.00.5510; HPMC
hard empty capsules may be imported under HTSUS subheading
3923.90.0080; and pullulan hard empty capsules may be imported under
HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are
provided for convenience and customs purposes, the written
description of the merchandise covered by this investigation is
dispositive.
Appendix II
List of Topics Discussed in the Issues and Decision Memorandum
I. Summary
II. Background
III. Use of Facts Otherwise Available and Application of Adverse
Inferences
IV. Subsidies Valuation
V. Changes Since the Preliminary Determination
VI. Analysis of Programs
VII. Discussion of the Issues
Comment 1: Whether Commerce Erred in Selecting ACPL as the Sole
Mandatory Respondent in This Proceeding
Comment 2: Whether Commerce Should Apply Adverse Facts Available
(AFA) Due to AGC PAM's Misreported Export Sales
Comment 3: Whether Commerce Should Apply AFA to ACG Regarding
Its Relationship With Custom Capsules Private Limited (Custom
Capsules)
Comment 4: Whether Commerce Should Find that the State
Government of Maharashtra (SGOM) Provided Land for LTAR to ACG
Comment 5: Whether Commerce Should Correct its Benefit
Calculation for the SGOM Waiver of Stamp Duty and Find this Program
Provided a Countervailable Benefit During the POI
Comment 6: Whether Commerce Used the Correct AUL Period Export
Sales Figures for ACG India Throughout its Calculations
Comment 7: Whether Commerce Should Complete its Benefit
Calculation for EPCGS Loans Outstanding
Comment 8: Whether Commerce Should Correct Its Calculation for
the Advance Authorization Program (AAP)
Comment 9: Whether Commerce Should Correct the Methodology for
Calculating Benefits for Duty Free Import Authorizations (DFIA)
Under the Special Economic Zone Program
Comment 10: Whether Commerce Incorrectly Allocated Benefits
Under the Duty Drawback Program (DDP)
Comment 11: Whether Commerce Should Revise the Methodology to
Calculate Benefits Related to the Remission of Duties and Taxes on
Export Products (RODTEP) Scheme
VIII. Recommendation
[FR Doc. 2025-23827 Filed 12-23-25; 8:45 am]
BILLING CODE 3510-DS-P
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</html>Indexed from Federal Register on December 29, 2025.
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