Bangladesh has cancelled a defence contract worth Rs 180.25 crore with Kolkata-based public sector shipbuilder Garden Reach Shipbuilders & Engineers Ltd (GRSE). The cancellation comes amid worsening diplomatic relations between Bangladesh and India. GRSE, which works under India’s Ministry of Defence, officially informed the stock exchange on Wednesday about the order being cancelled by the Bangladesh government.

Bangladesh cancelled a contract to build an advanced ocean-going tugboat for long-distance towing and rescue work at sea. The deal was with an Indian shipbuilder and was worth Rs 180.25 crore.This cancellation is seen as a response to India stopping Bangladesh from using its ports to send goods to other countries.The decision came after Bangladesh’s interim leader, Muhammad Yunus, made controversial comments during a visit to China. Yunus called India’s northeast “landlocked” and said Dhaka was the “only guardian” of the ocean in that region.

In another meeting with Nepal’s Deputy Speaker, Yunus talked about the need for India’s northeastern states, Nepal, Bhutan, and Bangladesh to work together on economic plans.He stressed cooperation in areas like hydropower, healthcare, and transportation, saying, “We have more to gain together than apart.”

As diplomatic tensions rise, India on May 18 announced strict restrictions on imports from Bangladesh, targeting ready-made garments and processed foods. The Directorate General of Foreign Trade(DGFT) stated that no Bangladesh ready-made garments will be allowed to enter India through Integrated Check Posts (ICPs) in the northeast. This action mirrors the trade limits Bangladesh put in place against India last month.