Bangladesh Cancels ₹180 Cr Defence Deal Amid Strain
In a significant blow to bilateral ties, Bangladesh has abruptly cancelled a ₹180.25 crore defence contract with Garden Reach Shipbuilders & Engineers Ltd (GRSE), a prominent Kolkata-based shipbuilding PSU under India’s Ministry of Defence. The agreement, signed in July 2024, involved the supply of an 800-tonne advanced ocean-going tug for the Bangladesh Navy.
While no official reason has been provided by Dhaka, diplomatic observers believe the move is retaliatory, following India’s recent decision to revoke transshipment facilities for Bangladeshi cargo destined for third countries. The strain in relations escalated after Muhammad Yunus, head of Bangladesh’s interim government, made controversial remarks during a state visit to China. Referring to India’s northeast as “landlocked,” Yunus claimed Dhaka was the “only guardian” of the sea in the region—a comment widely viewed in Delhi as dismissive and provocative.
Defence Contract Cancellation
The cancelled deal was part of India’s broader strategy to deepen defence cooperation with friendly neighboring countries. GRSE, which has a track record of building over 100 warships for the Indian Navy and Coast Guard, was expected to deliver the tugboat to strengthen Bangladesh’s maritime logistics and rescue capabilities.
This decision marks the first major defence rollback from Bangladesh since the formation of the interim government led by Yunus. It not only disrupts ongoing defense-industrial collaboration but also signals a shift in Dhaka’s foreign policy orientation under the interim regime, potentially tilting towards China.
Muhammad Yunus’s Role
Muhammad Yunus’s recent statements have sharply polarized India-Bangladesh ties. His characterization of India’s northeast and suggestion of Bangladesh’s maritime preeminence triggered diplomatic friction. Adding fuel to the fire, Yunus also proposed a joint economic bloc involving Bangladesh, India’s northeast, Nepal, and Bhutan to cooperate on sectors like hydropower, connectivity, and healthcare.
While the vision may have long-term merit, critics argue that Yunus’s unilateral approach and public posturing have undermined the diplomatic trust essential for such regional initiatives.
Strategic Implications
The cancellation of the defence contract highlights the fragility of India-Bangladesh relations in the current geopolitical climate. It underscores how political rhetoric, if not carefully measured, can derail years of strategic cooperation.
For India, the move is a setback to its neighborhood-first policy and an opportunity to reassess its regional engagement strategy. For Bangladesh, it raises questions about the interim government’s foreign policy consistency and its long-term implications on defense preparedness.
Going forward, both sides will need to engage diplomatically to prevent further deterioration and to focus on rebuilding trust, avoiding provocative narratives, and prioritizing shared strategic goals.
