Bangladesh cancels $21 million defence deal with India amid rising tensions

In a setback to India’s defence exports, Bangladesh has cancelled a $21 million contract with the state-run Garden Reach Shipbuilders and Engineers Ltd (GRSE). 

The contract, which was signed under India’s $500 million defence line of credit, involved the construction of an advanced ocean-going tugboat for the Bangladesh Navy. The termination of the deal, announced by Bangladesh authorities, comes amid escalating political tensions following the removal of Prime Minister Sheikh Hasina earlier in 2024.

The scrapping of the agreement, which was the first major deal under the $500 million defense credit, is seen as a diplomatic blow to India. 

The deal was signed in July 2024, shortly before Hasina’s departure from power. 

According to reports, GRSE informed the National Stock Exchange of India Limited about the cancellation, attributing it to a formal decision by the Bangladeshi government.

This development comes amid broader geopolitical shifts, as Bangladesh looks to recalibrate its international alliances in light of recent political changes.