Diplomatic Tensions Rise: Bangladesh Cancels Multi-Million Dollar Defense Deal with Indian Company

In a significant development amid rising diplomatic tensions, Bangladesh has cancelled a $21 million defence contract with an Indian shipbuilding company. The deal involved the construction of a modern sea tug, a specialised vessel used to tow large cargo ships and assist in maritime rescue operations.

According to international media reports, the cancelled contract was with a Kolkata-based shipbuilding firm operating under India’s Ministry of Defence. The decision comes just days after India imposed restrictions on the import of certain Bangladeshi products and revoked transshipment facilities for Bangladeshi cargo to third countries.

Sources suggest the cancellation is being viewed as a direct response to India’s recent trade-related decisions. The move signals growing strain in bilateral relations that have long included defence cooperation and trade partnerships.