New Delhi, Sept. 17 -- 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 at 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...