New Delhi: India has distanced its defence establishment from a €70 million ammunition controversy in Estonia, clarifying that Nagpur-based Neco Defence has no supply contract or connection with the ministry of defence or the Indian armed forces. The clarification comes after the company was linked to an ammunition deal in Estonia that has triggered a political controversy in the Baltic country.
“Neco Defence has no dealings or supply orders from our armed forces, but they may have supplied to state police as claimed on their website,” defence officials told ANI. They also said the company has “no connection or dealings with MoD” and has not received any supply order from the Indian defence establishment.
Neco Defence is part of a Nagpur-based group of companies involved in steel manufacturing and other businesses. According to media reports, defence officials said the company recently acquired Datasel, an Italy-based company that makes small arms and ammunition and also has a manufacturing facility in Romania.
The Romanian facility has a contract to fill artillery shells for Estonia, which would then be sent onward to Ukraine. This international business connection is why Neco Defence has been linked to the controversy, even though the company has no reported supply relationship with India’s armed forces.
As RNA Media had reported, Estonia signed contracts with Datasel in 2024 to buy large-calibre ammunition. The advance payments under the contracts reportedly reached around €70 million, with at least part of the money coming from the European Peace Facility, an EU fund used to support military assistance to Ukraine.
The deal later came under scrutiny after Estonian authorities raised concerns about delays, incomplete deliveries and the quality of the ammunition. Estonia terminated the contracts and sought the return of the money, while Datasel rejected the allegations and took the dispute to international arbitration.
The controversy also led to a political crisis in Estonia. Hanno Pevkur resigned as defence minister of Estonia on September 2, saying he was taking political responsibility for problems in the country’s defence establishment and procurement system.
Datasel has disputed Estonia’s claims about the deal and the money involved. Its director, Siddharth Jaiswal, said the company received about €59 million, rather than €70 million, and had submitted invoices for goods worth around €58 million.
The company has admitted that there were delays but has denied that the ammunition was of poor quality. Jaiswal has said Estonia cancelled the contracts after the funding available for the deal expired, leaving the company with finished ammunition as well as ammunition still under production.
There is also a disagreement over who the ammunition was actually meant for. Estonia and European sources have described the deal as part of efforts to provide artillery shells to Ukraine, while Datasel has said its contracts listed Estonia as the end user and did not specifically mention Ukraine.
The controversy has also raised questions about how Estonia handled its defence procurement process. The European Commission is examining the use of European Peace Facility money and whether Estonia could eventually be required to return some of the funds.
For India, officials have stressed that the Estonia controversy is separate from the country’s defence procurement system. Neco Defence has no dealings with the defence ministry or supply orders from the Indian armed forces, while any supplies to state police forces would be based on the company’s own claims on its website.