Bangladesh has cancelled a $21 million (Indian Rs 1.8 billion) deal with an Indian state-run shipbuilding firm for the construction of an advanced ocean-going tugboat amid strained relations between the two South Asian countries.
The relations between New Delhi and Dhaka have nosedived since Prime Minister Sheikh Hasina’s ouster from power August last year.
Currently, Nobel Peace Laureat economist Muhammad Yunus, is heading the interim Bangladeshi government as its chief adviser.
In a departure from Dhaka’s previous positions on national issues, the interim government has taken some key decisions on international, regional, trade and foreign policy affairs, which have redefined the country’s place in South Asia.
Kolkata-based Garden Reach Shipbuilders & Engineers Ltd (GRSE), which operates under India’s Ministry of Defense, formally notified the Indian Stock Exchange about Dhaka’s decision.
“We wish to inform you that the Government of the People’s Republic of Bangladesh has cancelled the order.”
The cancelled deal involved the construction of an advanced ocean-going tug for Bangladesh, a specialized vessel intended for long-distance towing and salvage operations in open seas, as per Indian and Bangladeshi media reports.
Businesses are bracing for possible impact after neighbors India and Bangladesh recently imposed tit-for-tat trade restrictions after months of verbal sparring.
Last month, Bangladesh restricted land imports of cotton yarn from India to protect local industries from cheaper imports.
Dhaka’s move came days after India abruptly stopped the transshipment facility it had offered Bangladesh to export its cargoes to third countries via its ports and airports.
New Delhi, while announcing the move, had cited traffic “congestion” as the reason.
