MTA : Is India getting “Fully Brazil Nirbhar MTA”

~ By Ishika Dutta

India’s proposed Medium Transport Aircraft (MTA) programme is becoming an important test of the country’s approach to defence manufacturing. The Indian Air Force needs a new generation of medium transport aircraft, and the competition is expected to involve Brazil’s Embraer C-390 Millennium and Lockheed Martin’s C-130J Super Hercules from the United States. The programme could eventually involve the production of around 60 aircraft in India, with a reported project cost approaching ₹1 lakh crore.

The Ministry of Defence has already moved the acquisition process forward, following an earlier Request for Information (RFI) and the subsequent circulation of a Request for Proposal (RFP) to selected vendors. However, the central question is no longer simply which aircraft will win the competition. It is whether India will acquire meaningful technological capabilities through this programme or establish a domestic assembly line that remains dependent on a foreign original equipment manufacturer (OEM).

At first glance, the Embraer C-390 appears to offer an opportunity for a deeper industrial partnership. Mahindra has emerged as Embraer’s Indian partner, and the two companies are expected to pursue domestic production of the aircraft. Yet, developments surrounding the proposed joint venture raise important questions about ownership, control and access to intellectual property.

The Mahindra–Embraer Partnership: Who Will Control the Technology?

In July, Mahindra established a new company intended to serve as a vehicle for its aerospace and defence manufacturing ambitions. The expectation was that this entity could provide the corporate structure through which the C-390 would be manufactured in India.

However, the reported ownership arrangement has changed the strategic picture. Under the structure described in recent developments, Embraer is expected to hold a controlling stake in the proposed venture, with Mahindra serving as its Indian partner. The reported arrangement has been described as a 51:49 partnership, although the precise ownership structure and final governance terms require confirmation from the companies’ official disclosures.

This distinction matters because ownership is not merely a financial consideration. It can determine who controls production decisions, technology access, intellectual property, future upgrades and the ability to develop independent manufacturing capabilities.

If Embraer retains effective control over the venture and its proprietary technologies, India may gain domestic production capacity without gaining corresponding control over the underlying design. Mahindra could still earn substantial revenue from the programme, particularly if the venture secures an order for approximately 60 aircraft. Nevertheless, commercial success for the Indian partner would not automatically translate into technological autonomy for India.

This is where the debate becomes more significant than the choice between two transport aircraft. A domestic assembly line can create jobs, support local suppliers and reduce some dependence on imported finished products. However, these benefits must not be confused with the ability to independently manufacture, modify, upgrade and sustain an aircraft without continued dependence on its foreign designer.

To understand this distinction, it is useful to examine three major examples from India’s automotive industry: Maruti–Suzuki, Bajaj–Kawasaki and Hero–Honda. Each partnership followed a different trajectory, offering lessons for the emerging aerospace arrangement.

Case Study 1: Maruti–Suzuki and the Risks of Losing Strategic Control

The Maruti–Suzuki partnership began when India had limited domestic capabilities in modern passenger-car manufacturing. The collaboration therefore served an important purpose: it introduced technology, established large-scale production and helped develop a domestic automotive ecosystem.

Initially, the Indian government held a majority stake in Maruti Udyog, while Suzuki held a smaller share. Over time, Suzuki increased its ownership as the government gradually reduced its stake. The Indian government eventually exited the company in 2007, leaving Suzuki with majority ownership and control.

Maruti Suzuki subsequently became one of India’s most successful automobile manufacturers. Its commercial performance and contribution to the domestic automotive ecosystem are undeniable. However, its corporate ownership structure also illustrates an important distinction: a product can be manufactured extensively in India without the company itself being controlled by Indian shareholders.

The strategic lesson is not that the Maruti–Suzuki partnership failed. On the contrary, it delivered substantial industrial and economic benefits. The lesson is that successful localisation does not necessarily lead to independent technological ownership or domestic corporate control.

Applied to the MTA programme, the concern is straightforward. If the Indian partner builds production capacity but the foreign OEM retains control over the venture and its core intellectual property, India could establish a successful aircraft manufacturing operation without acquiring the ability to independently evolve the platform.

That outcome may still be commercially worthwhile. However, it would be different from the technological independence that India increasingly seeks in its defence industry.

Case Study 2: Bajaj–Kawasaki and the Importance of Technology Partnerships

The Bajaj–Kawasaki relationship followed a different model. Rather than relying exclusively on a manufacturing arrangement, the companies entered into a technical collaboration that supported Bajaj’s motorcycle manufacturing capabilities.

The partnership helped Bajaj gain experience in technology-led motorcycle production. Meanwhile, Kawasaki benefited from Bajaj’s manufacturing base and distribution network in India. The relationship eventually ended in 2017, but Bajaj continued to develop its own products and expand its international business.

Bajaj’s subsequent investment in KTM provides another dimension to this story. The company acquired a stake in the Austrian motorcycle manufacturer and established a broader international relationship built around product development, engineering and market access. Bajaj’s stake in KTM was initially much larger than its later holding, which was reduced through subsequent transactions.

The important point is that Bajaj did not remain merely a contract manufacturer for a foreign brand. It developed its own engineering and manufacturing capabilities while building commercial relationships with international companies.

This model offers a more useful benchmark for India’s defence industry. A partnership should ideally create capabilities that remain valuable even after the original agreement ends. Technology absorption, engineering expertise, domestic supplier development and the ability to support future products are more important than the number of units assembled during the contract period.

For the MTA programme, the equivalent question is whether Mahindra and the wider Indian aerospace ecosystem will gain the skills and rights required to manufacture critical components, maintain the aircraft independently and participate meaningfully in future development.

Without such capabilities, the relationship would resemble a manufacturing arrangement more than a technology partnership.

Case Study 3: Hero–Honda and the Transition Towards Independence

The Hero–Honda partnership offers another useful comparison. The joint venture combined Honda’s motorcycle technology with Hero’s domestic manufacturing and market presence. This arrangement helped establish a large motorcycle business in India.

However, the two companies eventually decided to separate. Hero and Honda announced the termination of their joint venture in 2010, with the separation subsequently implemented. Hero continued its business under the Hero MotoCorp identity, while Honda expanded its own operations in India.

The separation demonstrated why the terms of a technology partnership matter long after the initial investment. Hero had to establish its independent product-development capabilities and secure the rights necessary to continue its business. Honda, meanwhile, retained its own technology base and continued to sell motorcycles and scooters in the Indian market.

The broader lesson is that a joint venture should ideally provide a pathway towards sustainable capabilities rather than create permanent dependence on the foreign partner.

For a defence programme, this requirement is even more important. Military platforms remain in service for decades. They require upgrades, component replacements, repairs and modifications as operational requirements evolve. Dependence on a foreign OEM can therefore extend well beyond the original procurement contract.

India must consequently assess any MTA partnership not only on the aircraft delivered but also on the capabilities available after production begins, after the initial order is completed and throughout the platform’s operational life.

Comparing the Three Models with the MTA Programme

These examples illustrate three different outcomes from international industrial partnerships.

Maruti–Suzuki demonstrates how a domestic manufacturing success can eventually operate under foreign corporate control. Bajaj’s experience demonstrates the value of developing independent capabilities while maintaining international partnerships. Hero–Honda illustrates the importance of ensuring that a company can sustain its business when a long-standing partnership ends.

The proposed Mahindra–Embraer arrangement must be evaluated against these outcomes. If Embraer retains control over the joint venture and the intellectual property, India could secure domestic aircraft production without achieving equivalent control over the technology.

However, the value of the arrangement will depend on the specific terms of technology transfer, manufacturing rights, access to technical data and the scope of work allocated to Indian companies. These details matter far more than the simple announcement that an aircraft will be manufactured domestically.

India should therefore ask several questions before treating the programme as a major technological breakthrough.

Will Indian companies manufacture critical structural assemblies and other high-value components, or will their role remain limited to final assembly? Will the Indian partner receive meaningful access to technical data, production processes and maintenance documentation? Can Indian companies independently repair and overhaul major systems? Will domestic suppliers be able to develop and manufacture components without requiring fresh approvals from the foreign OEM? Most importantly, will India have any meaningful role in future upgrades and derivative development?

The answers will determine whether the MTA programme builds a lasting aerospace capability or primarily creates a domestic production facility for a foreign-designed aircraft.

What India Should Negotiate Before Committing to the Partnership

India does not necessarily need complete ownership of a foreign aircraft design to benefit from an international partnership. However, it must clearly distinguish between technology transfer, licensed production, local assembly and genuine capability development.

Technology transfer should be measured against specific deliverables. These could include the domestic manufacture of critical structures, access to repair and overhaul procedures, training for Indian engineers, qualification of domestic suppliers and the ability to produce selected components independently.

Intellectual property also requires careful treatment. A foreign OEM is unlikely to surrender ownership of its entire aircraft design, and such a demand may be commercially unrealistic. Nevertheless, India can negotiate meaningful rights over manufacturing processes, maintenance, component production and future domestic industrial participation.

The agreement should also define what happens when production contracts end. Indian facilities should not become dependent on a single foreign supplier for every major modification or replacement component. Wherever feasible, the arrangement should develop skills and infrastructure that can support other Indian aerospace programmes.

Finally, the government must evaluate the industrial structure separately from the aircraft’s operational merits. The C-390 and C-130J should be assessed against the Indian Air Force’s performance requirements, lifecycle costs, delivery schedules, support arrangements and operational suitability. The better aircraft for the Air Force is not automatically the better technology-transfer partner, and vice versa.

These are two separate questions. India needs the right aircraft, but it also needs a partnership that delivers the greatest possible long-term value to its domestic aerospace industry.

In Nutshell: Manufacturing in India Is Not the Same as Building Indigenous Capability

The emerging MTA programme highlights a recurring challenge in India’s defence-industrial strategy. Domestic production is an important first step, but it cannot be the final measure of self-reliance.

If Mahindra and Embraer establish a successful manufacturing operation, India may gain substantial economic and industrial benefits. Yet, if the foreign OEM retains control over the venture and its proprietary technologies, those benefits may not translate into strategic autonomy at the same level.

The automotive industry provides useful lessons. Maruti–Suzuki shows that industrial success can coexist with foreign corporate control. Bajaj’s evolution illustrates the benefits of developing capabilities beyond an initial technical collaboration. Hero–Honda demonstrates why long-term independence must be considered from the beginning of a partnership.

The challenge for India is to learn from all three experiences while avoiding a model in which domestic companies earn revenue from manufacturing but remain dependent on foreign partners for critical technology.

Ultimately, the MTA programme should not be judged solely by how many aircraft are assembled in India. It should be judged by how much capability India retains when the assembly line is running, when the original contract is complete and when the aircraft eventually requires its next major upgrade.

That is the difference between manufacturing an aircraft in India and building an aerospace capability that India can genuinely call its own.