Navy inks deal with India’s GRSE under $500-mn line of credit

The Bangladesh Navy has inked a deal with India's State-run Garden Reach Shipbuilders and Engineers (GRSE) for an 800-tonne ocean-going tug – the first major contract under a $500-million line of credit offered by New Delhi for defence purchases.

The agreement was signed in Dhaka on Sunday by representatives of the Bangladesh Navy's directorate general of defence purchases and GRSE to coincide with a four-day visit by the Indian Navy chief, Admiral Dinesh K Tripathi, aimed at bolstering bilateral defence ties and to explore new avenues for naval cooperation.

The $500-million line of credit was operationalised last year and Bangladesh has used it to finalise a few minor deals with India for equipment such as bailey bridges and vehicles, people familiar with the matter said on condition of anonymity.

"This is the first major deal under the line of credit and will enable Indian shipyards to gain a foothold in Bangladesh," one the people cited above said.

The Bangladesh Navy operates vessels procured from different countries, though many of its frontline warships and two attack submarines are of Chinese origin.

During Prime Minister Sheikh Hasina's visit to India last month, the two sides agreed to strengthen defence cooperation with a long-term perspective.

India has been eyeing Bangladesh as a market for a range of military hardware, from specialist vehicles to helicopters, and maintenance of Russian-origin equipment, people familiar with the matter said. Among the items Bangladesh has shown an interest in are specialist vehicles from Tata and Mahindra, Tejas combat aircraft and Dhruv light helicopter, the people said.

The two sides have also explored the prospect of an Indian role in maintaining Bangladesh's Russian-origin equipment, especially aircraft such as Mi-17-1V helicopters, Antonov An-32 transport aircraft and MiG-29 jets. India operates these aircraft and has long-established maintenance facilities.

The deal will also be a fillip for Kolkata-based GRSE, which has stepped up its efforts to obtain export orders. Last month, it signed an agreement with Germany's Carsten Rehder Schiffsmakler and Reederei GmbH & Co for building four multi-purpose vessels of 7,500 DWT each.

The first warship exported by India – an offshore patrol vessel provided to Mauritius in 2014 – was built by GRSE. In 2021, a fast patrol vessel built by GRSE was exported to Seychelles. The shipyard is also working on six patrol boats and a dredger for the government of Bangladesh.