Bangladesh scraps $21m deal with Indian shipbuilder

Bangladesh has reportedly cancelled a $21 million deal with a Kolkata-based Indian state-run shipbuilding firm for the construction of an advanced ocean-going tugboat amid strained relations between the two sides since the fall of Sheikh Hasina-led Awami League government last year.

The move comes days after India restricted imports of ready-made garments from Bangladesh only to Kolkata and Nhava Sheva ports.

The Garden Reach Shipbuilders and Engineers Ltd (GRSE) signed a contract for the tugboat with the Bangladesh Navy in July 2024, a month before Hasina was ousted from power.

The GRSE wrote a letter to the National Stock Exchange of India Limited about the contract cancellation, reports Hindustan Times.

“...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,” said the company on Wednesday in an exchange filing.

The contract was signed as India and Bangladesh agreed to strengthen defence cooperation with a long-term perspective during Hasina’s visit to India in June 2024. The deal with the GRSE for an 800-tonne ocean-going tugboat was the first major contract under India’s $500 million line of credit for defence purchases.