NEW DELHI: Bangladesh has cancelled a $21 million defence contract with India’s state-run shipbuilder Garden Reach Shipbuilders and Engineers Ltd (GRSE) for the construction of an advanced ocean-going tugboat for the Bangladesh Navy, Hindustan Times reported.
The decision comes amid strained bilateral relations following the ouster of Prime Minister Sheikh Hasina from power in 2024.
The cancelled deal was the first major contract under India’s $500 million line of credit for defence purchases, signed in July 2024—just a month before Hasina’s departure. GRSE notified the National Stock Exchange of India Limited about the cancellation, citing a decision by the Government of Bangladesh.
“In terms of Regulation 30 and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the ‘SEBI Listing Regulations’), we wish to inform you that the Government of the People’s Republic of Bangladesh has cancelled the order,” the company stated in an exchange filing.
Tensions between the two countries have escalated in recent months. India recently imposed restrictions on imports of Bangladeshi ready-made garments, limiting them to specific ports—impacting exports worth approximately $700 million annually.
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In addition, New Delhi barred imports of Bangladeshi consumer goods through 11 northeastern land border posts earlier this month. In April, India ended a transit arrangement that allowed Bangladeshi exports to third countries via Indian airports and seaports. In response, Bangladesh halted yarn imports from India through land ports on April 13.
Bangladesh was India’s largest trading partner in the subcontinent during FY24. India was Bangladesh’s second-largest export market, accounting for 12% of its total exports. India’s exports to Bangladesh totaled $11.06 billion in FY24, while imports stood at $1.8 billion.
Earlier, Bangladesh’s interim government banned all activities of the Awami League, the political party of deposed former Prime Minister Sheikh Hasina, under the country’s Anti-Terrorism Act, citing national security concerns.
