India, May 23 -- Bangladesh has cancelled a $21 million deal with a Kolkata-based Indian state-run shipbuilding firm for the construction of an advanced ocean-going tugboat amid strained relations between the two sides since Prime Minister Sheikh Hasina's removal from power last year.

The move comes days after India on Saturday restricted imports of ready-made garments from Bangladesh only to Kolkata and Nhava Sheva ports.

The Garden Reach Shipbuilders and Engineers Ltd (GRSE) signed a contract for the tugboat with the Bangladesh Navy in July 2024, a month before Hasina was ousted from power. The GRSE wrote a letter to the National Stock Exchange of India Limited about the contract cancellation.

"...In terms of Regulation 30 and other ...