Bangladesh has officially cancelled a $21 million (approximately BDT 2.56 billion) contract with a West Bengal-based Indian company, according to multiple Indian media reports on Friday (May 23).
As reported, under this agreement, Bangladesh was to purchase tugboats worth USD 21 million (around INR 1.8 billion) for its navy from the Kolkata-based defence company.
However, last Saturday, India imposed restrictions on the transport of goods, including garments made in Bangladesh, through its land ports. Following this development, the Bangladeshi side decided to cancel the tugboat order, Indian media reported.
According to the reports, Chief Advisor Dr Muhammad Yunus referred to India's northeastern "Seven Sisters" as a landlocked region and described Bangladesh as the region's only maritime guardian. He also proposed that China expand its trade operations through this area. In response, the Indian government restricted the movement of Bangladeshi goods through its land ports.
India's influential media outlet India Today stated that the Bangladesh government cancelled the INR 1.8 billion contract with Garden Reach Shipbuilders & Engineers Ltd (GRSE), a company operating under India's Ministry of Defence.
According to NDTV, GRSE manufactures and maintains ships and also works on vessels for the Indian Navy and Coast Guard. The company informed India's stock market that the Bangladeshi government had cancelled its order.
The Hindu Business Line reported that the cancellation was mutually agreed upon by the Bangladesh government and the company. The Kolkata-based GRSE had received the order to build an 800-ton tugboat for Bangladesh.
The agreement to purchase the tugboat was signed in July last year between representatives of the Indian company and senior officials of the Bangladesh Navy. The order was part of a larger USD 500 million defence loan assistance deal signed between Dhaka and New Delhi in 2023. The tugboat was the first major purchase under that agreement.
Under the same Indian credit line, Bangladesh has been developing other infrastructure projects initiated during former Prime Minister Sheikh Hasina's tenure. According to ETV Bharat, India has extended USD 8 billion to Bangladesh under the Line of Credit over the past eight years.
