THE Indian National Shipowners' Association has asked the government to extend a number of incentives to the shipping industry to strengthen its competitiveness, according to Lloyd's List. First among the demands in a memorandum, sent to the Surface Transport Ministry, is a call to raise the depreciation rate on ships to 33.33 per cent from the current level of 20 per cent. The association is particularly keen to see this raised because of the fall in the value of the rupee against the US dollar and other hard currencies. Most ships have been purchased with foreign currency loans and, as a result, repayment of principal and interest is translated into Indian currency at the prevailing market rate. Since repayment is made from reserves created out of the depreciation charge, the reserves are not adequate to meet the repayment demands as well as the demands of fleet replacement. And, because Indian companies have been buying second-hand vessels with a life of eight to 12 years, there is need for a more accelerated depreciation rate. The government should increase the depreciation rate in the new financial year's budget to be presented to parliament in February, the association said. Investors in shipping should also be provided suitable tax benefits if they are to forego investing in other profitable sectors, it added. Ships' crews are exempted from income tax only if they are employed overseas for 183 days in a year, but in many cases they miss out on the benefit because their ships have to call at home ports frequently at intervals of less than 183 days. The association also insisted crew should be exempted from tax the entire period they are employed on board as this is the only way officers and seamen can be persuaded to remain with the Indian fleet. It also wants the government to give export industry status to shipping so that owners can benefit from import duty exemption on consumer goods, spares and stores. The association is also asking for the removal of all restrictions on chartering out without time limit instead of the current system of annual approvals and chartering controls on owners. It has also asked the government to scrap all pre-conditions and restrictions regarding automatic ship acquisition and to introduce time-bound norms for clearance and approvals.