GRSE naval contract worth Rs 179 crore cancelled by Bangladesh, no impact on shipyard’s bottom line
The contract, signed in July last year during Navy chief Admiral Dinesh K Tripathi’s visit to Dhaka, had been the first major agreement under India’s $500 million line of credit for defence purchases. The tug was to be 61 metres long, with a maximum speed of at least 13 knots when fully loaded, and was designed for long-distance towing and maritime salvage operations.
GRSE, in a filing to the National Stock Exchange, confirmed the cancellation on Wednesday. “…In terms of Regulation 30 and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the ‘SEBI Listing Regulations’), we wish to inform you that the Government of the People’s Republic of Bangladesh has cancelled the order,” it said.
Relations between India and Bangladesh have plunged since Hasina fled her country on 5 August 2024 and sought refuge in India. In the aftermath, the interim administration under Muhammad Yunus has shown a marked pivot towards China and Pakistan for defence and economic support.
Yunus sparked further concern in India with remarks suggesting Bangladesh’s strategic advantage due to India’s northeastern states being landlocked. “India’s northeast has no way to reach the ocean except through Bangladesh,” Yunus said, adding that this presented “a huge possibility of an extension of the Chinese economy.”
The diplomatic chill has seen both nations take tit-for-tat trade actions. Earlier this month, India barred Bangladeshi imports—mainly readymade garments worth $700 million—from all but two ports: Kolkata and Nhava Sheva. In April, India withdrew the transshipment facility that allowed Bangladeshi exports to third countries via Indian ports and airports. Dhaka responded by halting Indian yarn exports through land ports and introducing transit fees on Indian cargo.GRSE, a public sector shipbuilder catering primarily to the Indian Navy and Coast Guard, said the cancellation would not significantly affect its financial health. “This order though would not have impact on GRSE’s finances… it would have contributed a mere 0.8% to GRSE’s existing order book of ₹22,680.75 crore as on March 31, 2025,” the company stated.Instead, the company is looking ahead to bigger prospects. It has emerged as the lowest bidder for the Indian Navy’s project to build five ‘Next Generation Corvettes’ (NGC), estimated at ₹25,000 crore. These vessels will feature anti-ship missile capabilities, anti-submarine warfare systems, and green warship technologies.
GRSE’s portfolio also includes four Next Generation Offshore Patrol Vessels, three Advanced Guided Missile Frigates, and Anti-Submarine Warfare Shallow Water Crafts. The company recently completed sea trials of the indigenous 30mm Naval Surface Gun with a new electro-optical fire control system, underscoring its shift towards weapon system production.
Chairman and Managing Director P.R. Hari said during a recent analyst call that GRSE is targeting up to ₹70,000 crore from future naval projects.
Bangladesh’s cancellation of the naval deal underscores a broader rift that has implications beyond defence. In FY24, Bangladesh was India’s largest trading partner in the subcontinent. Indian exports to Bangladesh totalled $11.06 billion, while imports from Bangladesh stood at $1.8 billion.
The breakdown in trust marks a sharp departure from the cooperation seen during Hasina’s tenure, including her June 2024 visit to India where the two countries agreed to deepen defence ties. Now, those gains are unravelling. As Bangladesh looks to diversify its alliances, India is recalibrating its own approach to regional trade and security.
While GRSE walks away from the deal relatively unscathed, the diplomatic fallout is likely to leave a deeper mark.
(With inputs from TOI)
