In a move signaling growing diplomatic friction between South Asian neighbors, the government of Bangladesh has cancelled a $21 million contract awarded to Garden Reach Shipbuilders & Engineers Ltd (GRSE) — a public sector enterprise under India’s Ministry of Defence known for building advanced maritime vessels.
The cancelled agreement, initially signed in July 2024, involved the supply of modern sea-going tugboats to Bangladesh. GRSE confirmed the contract termination in a regulatory disclosure submitted to the National Stock Exchange of India and BSE Ltd, in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
This development follows closely on the heels of India’s recent decision to withdraw transshipment facilities that previously allowed Bangladesh to export its goods to third countries via Indian territory. Experts view both actions as clear indicators of escalating strain in bilateral ties.
The backdrop to this diplomatic shift includes a change in political leadership in Bangladesh after the end of Prime Minister Sheikh Hasina’s government in August 2024. Since then, several geopolitical developments have suggested a cooling of relations between the once-close allies.
Political analysts have noted that ties between New Delhi and Dhaka have become increasingly uneasy in recent months, with trade and defense cooperation facing visible disruptions.
Despite the setback, GRSE highlighted in the same statement that it has emerged as the lowest bidder for the Indian Navy’s upcoming Next-Generation Corvettes (NGC) project, signaling its continued dominance in India’s defense shipbuilding sector.
As strategic recalibrations unfold across South Asia, observers are watching closely how India and Bangladesh navigate this phase of mutual reevaluation — especially as defense and trade emerge as flashpoints in their diplomatic engagement.
