New Delhi, Sept. 18 -- The Union government is examining a proposal to exempt Indian seafarers who work on Indian ships from tax deducted at source (TDS), or reduce the TDS rate, to bring their salaries on a par with those of seafarers employed by foreign shipping lines and make Indian ships more competitive, two people aware of the matter said. The ministry of ports, shipping, and waterways has suggested to the finance ministry that such a TDS exemption or reduction would help Indian shipping lines equalize operating costs for domestic and foreign shipping companies in Indian coastal waters, one of the people said. This would allow Indian shipping companies to increase their share in the movement of goods along Indian coast, and raise the share of Indian flagged ships on both domestic and overseas voyages, this person added. Indian seafarers numbered about 320,000 at the end of FY25, accounting for about 16% of the global workforce of 1.9-2 million, according to the shipping ministry. Only the Philippines (about 550,000 seafarers) and China (about 350,000) have more. But the unfavourable tax treatment causes many Indian seafarers to look for jobs on foreign ships, and only 25,000-30,000 Indian seafarers work on Indian flagged ships. The TDS rate is the same rate at which an individual's income is taxed. As most mid-level seafarers employed by Indian companies earn more than Rs.24 lakh a year, including bonuses and allowances, they fall under the 30% bracket. The finance ministry has now asked the shipping ministry to provide the number of Indian seafarers employed on Indian ships that saw their cost of operations rise because of TDS. It has sought this information to decide whether seafarers on these specific ships should be exempted from TDS or whether the tax should be reduced for the entire sector, the second person quoted above said. The move is expected to promote the growth of Indian shipping lines, which number a mere 1,550 at present and have a gross tonnage of about 14 million. Of this, just 1-1.5 million tonnes is used for coastal trade and the rest for overseas trade. Meanwhile the presence of foreign shipping lines, even for coastal movement, continues to increase. Shipping secretary T. K. Ramachandran told Mint, "The issue of TDS has been taken up with the revenue department. Seafarers who are on foreign flagged ships don't face TDS but Indian flagged ships have to deduct this tax. Because of this, Indian ships have to increase the salaries of seafarers, companies are saying. The revenue department has asked for the number of seafarers that have to be paid higher salaries because of TDS, raising the overall cost of operations. That data is being analysed and we are pushing the issue so that relief could be provided." Meanwhile, shipping industry representatives said they were pushing for a reduction in TDS for the sector to equalise operating costs for domestic and foreign shipping companies....