Estonia Defence Minister Quits Over Ukraine Arms Deal with Indian Firm

Pevkur said late on Wednesday he was ready to take “political responsibility” for the scandal around the alleged mishandling of government funds after his ministry’s procurement agency made around €70 million ($81 million) in upfront payments to a company with no notable defense-related experience.

The procurement involved Datasel SRL, an Italy-based company acquired by India’s Neco Defence Munitions in 2024.

The resignation of Pevkur, who was Estonia’s longest-serving minister and well known internationally, is likely to increase pressure on the minority government of Prime Minister Kristen Michal.

One opposition party said it would seek a no-confidence vote against the premier, although it’s not clear there is enough support for such a move so close to the parliamentary elections next March.

Pevkur on Wednesday called the situation an “ordinary contract dispute” that had to be judged in the context of international pressure to urgently aid Kyiv’s defenses against Russia’s invasion amid a global shortage of weapons supply.

“The defense minister doesn’t conduct contract negotiations; the defense minister does not count socks and ammunition,” he said after his resignation. “The defense minister makes the fundamental decision to support Ukraine.”

Parliament on Thursday held another hearing connected to a government audit that found accounting problems with a major chunk of the Defense Ministry’s inventory. The audit also raised the risk of corruption amid ballooning defense budgets.

The Estonian Prosecutor’s Office has also been investigating the Defense Ministry’s finances.

The funding for the deal was provided by the EU as part of a multi-billion-euro effort to shore up Kyiv’s weapons stocks at a time when 155mm artillery shells were in short supply.

Estonian defense officials have attempted to cancel the tender, launching a lawsuit against the supplier and contacting multiple countries’ embassies for help.

Datasel, the company, which is backed by Indian investors, told local investigative outlet Eesti Ekspress that it has upheld its obligations and called the effort to cancel the contracts unreasonable.

Estonia’s defense procurement agency has prided itself for being fast and nimble, putting it in a position to act as a facilitator for other European nations buying weapons for Ukraine. It has executed around €400 million in contracts on behalf of international donors and with revenue from frozen Russian assets sanctioned in Europe, according to Pevkur.