Kolkata, May 22, 2025 — A contract awarded to India’s state-owned shipbuilding company, Garden Reach Shipbuilders & Engineers Ltd. (GRSE), by the Bangladesh Navy for the construction of a state-of-the-art ocean-going tug has been officially cancelled, nearly a year after the deal was signed. GRSE disclosed the cancellation in a stock exchange filing on Wednesday (May 21).
The $21 million (approximately ₹180 crore INR) order, placed under the previous government led by Prime Minister Sheikh Hasina, had initially led to a nearly 10% surge in GRSE’s share price. However, news of the contract cancellation caused a brief drop in share value on Thursday morning, though it later recovered.
No official statement has been issued by Bangladesh’s Ministry of Defence or Navy explaining the reason for the cancellation. A senior official within the Bangladeshi government told BBC Bangla that they were aware of the cancellation but could not provide details on when or why the decision was made.
Observers speculate that this move may be in line with the interim government’s trend of reversing several international deals and decisions made during Sheikh Hasina’s tenure. GRSE has also not provided any explanation regarding the cancellation from their side.
An ocean-going tug, also known as a tugboat, is a powerful vessel designed to tow or push distressed ships in open sea to safety. Despite their relatively small size, these tugboats can handle ships significantly larger than themselves, and are essential for docking and berthing large vessels in ports worldwide. Such vessels are also crucial in maritime rescue operations and for towing wreckage or disabled ships across long ocean distances.
According to the agreement, GRSE was to build an ocean-going tug measuring 61 meters in length and 15.8 meters in width, with a depth of around 7 meters. The vessel was expected to enhance the Bangladesh Navy’s strategic capabilities. The ship was designed to travel at a maximum speed of 13 nautical miles per hour under full load.
The contract was signed on July 1, 2024, between GRSE and Bangladesh’s Directorate General of Defence Purchase under the Ministry of Defence. It was expected that the ship would be delivered within 24 months, by mid-2026.
The agreement was reportedly finalized during Sheikh Hasina’s visit to India in the latter half of June 2024—her second visit that month—although no public announcements were made at the time.
GRSE is one of India’s oldest and premier shipbuilding companies, established in 1884 during British rule. Located on the banks of the Hooghly River in Kolkata, the company began by building merchant ships and now specializes in warships, tankers, bulk carriers, and platform supply vessels for the Indian Navy and Coast Guard.
GRSE is a publicly listed company on the Indian stock exchange, and its activities are regularly disclosed through official filings. The current Chairman and Managing Director is Commodore P. R. Hari (Retd.).
Information about both the signing and cancellation of the Bangladesh contract came to light through GRSE’s mandatory stock exchange disclosures. A senior defence analyst in Delhi told the BBC that India and Bangladesh have had a comprehensive defence cooperation agreement for nearly a decade, though the full details remain undisclosed.
“It’s likely that the order for the ocean-going tug was placed under the framework of this agreement, which includes provisions for defence equipment supply,” the analyst added.