Bangladesh has officially canceled an agreement involving a $21 million purchase from a Kolkata-based Indian defense company, amid escalating tensions between the two South Asian neighbors. Multiple prominent Indian media outlets reported the decision on Friday.
The contract was for Bangladesh to acquire tugboats for its navy from Garden Reach Shipbuilders & Engineers Ltd (GRSE), a defense firm under India’s Ministry of Defence. The cancellation comes in the wake of recent diplomatic strains, including India’s decision to impose a transportation ban.
On May 17, India announced a ban on transporting various goods, including garments manufactured in Bangladesh, through its land ports. In response, Bangladesh decided to scrap the order for the navy’s tugboats, Indian media reported.
Chief Adviser Muhammad Yunus had previously highlighted the strategic importance of Bangladesh’s maritime role, referring to India’s northeastern Seven Sisters region as landlocked and emphasizing Bangladesh’s position as its maritime guardian. Yunus also proposed expanding trade routes through China, which may have contributed to the Indian government’s decision to restrict transportation.
According to India Today, Bangladesh’s cancellation of the $21 million contract was executed with GRSE, a key defense contractor in India, signaling a possible shift in diplomatic and economic relations amidst ongoing tensions.
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