Bangladesh cancels $21 million deal with Indian shipbuilding firm

PM Modi with Bangladesh interim government head Muhammad Yunus. (File photo/PTI)

Bangladesh has cancelled a $21 million contract for construction of an ‘Advanced Ocean-Going Tug’ with Kolkata-based Garden Reach Shipbuilders and Engineers Ltd (GRSE), a public service undertaking under the Ministry of Defence.

The decision comes soon after India’s announcement of withdrawing the transshipment facility to Bangladesh for export of its cargo, according to a report by The Hindu.

In an information submitted by the company to National Stock Exchange of India Ltd and BSE Ltd under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the defence PSU on May 21 stated that Government of the People’s Republic of Bangladesh has cancelled the order. GRSE had bagged the order 01 Jul 2024, for construction of the ocean-going tug.

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

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, according to Hindustan Times.