Staff Reporter:
Bangladesh has cancelled an agreement involving $21 million with an Indian company based in West Bengal amid worsening bilateral ties between the two South Asian neighbours.
This cancellation was reported by multiple leading Indian media outlets on Friday.
According to the reports, under the agreement, Bangladesh was supposed to purchase tugboats worth $21 million from a Kolkata-based defence company for its navy.
On 17 May, India imposed a ban on the transportation of various goods, including garments made in Bangladesh, through its land ports. Following this, Bangladesh decided to cancel the order for the navy’s tugboats, Indian media reported.
The reports mentioned that Chief Adviser Prof Muhammad Yunus had referred to India’s northeastern Seven Sisters region as a landlocked area and identified Bangladesh as the only maritime guardian for this region.
He also proposed to China to expand trade through this route, which reportedly prompted the Indian government to impose the transportation ban.
According to influential Indian media outlet India Today, the government of Bangladesh canceled the $21 million contract with Kolkata’s Garden Reach Shipbuilders & Engineers Ltd (GRSE), a company under India’s Ministry of Defence.
NDTV reported that the company is engaged in shipbuilding and maintenance, handling vessels for the Indian Navy and Coast Guard. The company informed the stock exchange, “We are informing you that the Government of Bangladesh has canceled their purchase order.”
Indian business newspaper the Hindu Business Line stated that the purchase order was cancelled through mutual discussions between the Government of Bangladesh and the company. The Kolkata-based GRSE had received an order from Bangladesh to build an 800-tonne tugboat.
The contract to buy the tugboat was signed in July last year between representatives of the Indian company and senior officials of the Bangladesh Navy.
In 2023, Dhaka and New Delhi signed a $500 million defense loan agreement, under which this tugboat order was the first major purchase.
Other infrastructure projects in Bangladesh are also being developed with the Indian loan, which began during the tenure of former authoritarian Prime Minister Sheikh Hasina.
According to ETV India, over the past eight years, India has provided $8 billion to Bangladesh under lines of credit.
