Former Dictator Sheikh Hasina handed billions of dollars in contracts to Indian companies to stay in power forever. However, Hasina’s dream was shattered when Bangladesh Gen Z ousted her from the country, and she fled to India. Hasina’s corruption, graft, and embezzlement were exposed to the public.
In a clear reflection of deteriorating diplomatic ties, as reported by TOI, Bangladesh has cancelled a $21 million contract with Kolkata-based defence shipyard Garden Reach Shipbuilders & Engineers Ltd (GRSE) to construct an advanced ocean-going tug. The move follows increasing frictions between the two neighbours since the ousting of former Prime Minister Sheikh Hasina in August 2024.
The purpose of these military contracts is to weaken Bangladesh’s military and make the military dependent on India’s supplies. India protects its interests. If there is any fallout from the China-India war and Bangladesh backs China, then India can stop supplying spare parts, making Bangladesh’s military equipment inoperable.
The following cancellation should be the SAMPRITI exercised with India so that the Indian RAW cannot infiltrate inside the Bangladesh military.
The contract, signed in July last year during Navy chief Admiral Dinesh K Tripathi’s visit to Dhaka, was the first major agreement under India’s $500 million line of credit for defence purchases. The tug was to be 61 metres long, with a maximum speed of at least 13 knots when fully loaded, and designed for long-distance towing and maritime salvage operations.
GRSE, in a filing to the National Stock Exchange, confirmed the cancellation on Wednesday. “…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,” it said.
Relations between India and Bangladesh have plunged since Hasina fled her country on 5 August 2024 and sought refuge in India. In the aftermath, the interim administration under Muhammad Yunus has shown a marked pivot towards China and Pakistan for defence and economic support.
Yunus sparked further concern in India with remarks suggesting Bangladesh’s strategic advantage due to India’s northeastern states being landlocked. “India’s northeast has no way to reach the ocean except through Bangladesh,” Yunus said, adding that this presented “a huge possibility of an extension of the Chinese economy.”
The diplomatic chill has seen both nations take tit-for-tat trade actions. Earlier this month, India barred Bangladeshi imports—mainly readymade garments worth $700 million—from only two ports: Kolkata and Nhava Sheva. In April, India withdrew the transhipment facility that allowed Bangladeshi exports to third countries via Indian ports and airports. Dhaka responded by halting Indian yarn exports through land ports and introducing transit fees on Indian cargo.
Bangladesh’s cancellation of the naval deal underscores a broader rift that has implications beyond defence. In FY24, Bangladesh was India’s largest trading partner in the subcontinent. Indian exports to Bangladesh totalled $11.06 billion, while imports from Bangladesh stood at $1.8 billion.
The breakdown in trust marks a sharp departure from the cooperation seen during Hasina’s tenure, including her June 2024 visit to India, during which the two countries agreed to deepen defence ties. Now, those gains are unravelling. As Bangladesh looks to diversify its alliances, India is recalibrating its approach to regional trade and security.
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