Embraer and Mahindra eye India MRO hub if C-390 wins IAF contract

Brazil's Embraer and India's Mahindra Group announced plans to establish a Maintenance, Repair and Overhaul (MRO) facility in India for the C-390 Millennium ...

What Happened

Brazil's Embraer and India's Mahindra Group announced plans to establish a Maintenance, Repair and Overhaul (MRO) facility in India for the C-390 Millennium military transport aircraft
The announcement builds on a strategic partnership signed in October 2025 for production and support of the C-390 in India
The MRO facility is contingent on the C-390 winning the Indian Air Force's Multi Transport Aircraft (MTA) programme to replace the ageing An-32 and IL-76 fleets
The Ministry of Defence had issued a Request for Information (RFI) in December 2022 for the MTA programme, with a requirement of 40-80 aircraft
India could evolve into a regional MRO support hub for other C-390 operators globally

Static Topic Bridges

IAF Multi Transport Aircraft (MTA) Programme

The Indian Air Force has been seeking medium transport aircraft to replace its ageing fleet of Soviet-era Antonov An-32 (inducted 1984) and Ilyushin IL-76 (inducted 1985) aircraft. The MoD issued a Request for Information (RFI) in December 2022 specifying a weight category of 18-30 tonnes, with the ability to operate from unprepared runways including Advanced Landing Grounds (ALGs) in Ladakh and the Northeast. Three companies responded to the RFI: Lockheed Martin (C-130J), Embraer (C-390 Millennium), and Airbus (A400M).

Requirement: 40-80 aircraft (RFI asked for Rough Order of Magnitude costs for batches of 40, 60, and 80)
Aircraft to be replaced: An-32 (~100 in service, inducted 1984) and IL-76 (~17 in service, inducted 1985)
RFI mandates: Establishment of a dedicated manufacturing line in India, methods to enhance indigenisation, design and integration capabilities in India through subsidiary or joint venture
Contenders: Embraer C-390 (26-tonne payload, twin-jet), Lockheed Martin C-130J (already 12 in IAF service), Airbus A400M
C-390 specifications: Most modern military transport in its class; up to 26-tonne payload; higher speed and range than comparable aircraft; operational ceiling 36,000 ft

Connection to this news: The Embraer-Mahindra partnership positions the C-390 as a strong contender for the MTA programme, with the proposed MRO hub adding a significant Make in India component to the bid.

India's MRO Policy and Aerospace Ecosystem

India's MRO sector has been historically underdeveloped, with only 15-20% of MRO services performed domestically and the remaining 80-85% outsourced to international providers — mainly in Singapore, Sri Lanka, and the Middle East. The MRO Policy 2021 introduced several reforms to attract investment: customs duty on aircraft components used in MRO was reduced to 0%, GST on MRO services was reduced from 18% to 5%, and 100% FDI was permitted under the automatic route.

India's commercial MRO market: ~Rs 185 billion (2024), projected to reach ~Rs 340 billion by 2031 (~9% CAGR)
Defence MRO market: Expected to reach Rs 260 billion by 2031 for a fleet of 2,000+ military aircraft
Domestic MRO share: Only 15-20% performed locally; government target is to increase this to 50%+ through policy reforms
Key policy changes: 0% customs duty on MRO components; GST reduced 18% to 5%; 100% FDI via automatic route
National Civil Aviation Policy 2016 and subsequent amendments provided the framework for MRO development
Major defence MRO facilities: HAL (Bangalore, Nashik, Koraput), BRD (Base Repair Depots) of the IAF

Connection to this news: The proposed Embraer-Mahindra MRO facility would be a major addition to India's nascent defence MRO ecosystem, potentially making India a regional support hub for C-390 operators and reducing dependence on foreign MRO providers.

Defence Procurement — Make in India and Atmanirbhar Bharat

The Atmanirbhar Bharat initiative in defence aims to reduce import dependence and build a domestic defence-industrial base. India set a target of Rs 1.75 lakh crore in defence production by FY2024-25. Multiple positive and negative indigenisation lists have been notified, restricting imports of specified defence items. The Defence Production and Export Promotion Policy (DPEPP) 2020 set a defence export target of $5 billion by 2025.

Atmanirbhar Bharat in defence: Launched 2020; positive indigenisation lists restrict import of 500+ items
Defence production FY2024: Rs 1.27 lakh crore (target: Rs 1.75 lakh crore by FY2025)
Defence exports FY2024: Rs 21,083 crore (all-time high); target $5 billion
FDI in defence: Automatic route up to 74%; government route beyond 74% for cases with access to modern technology
iDEX (Innovations for Defence Excellence): Supports startups and MSMEs in defence innovation
Defence Industrial Corridors: Two corridors — Uttar Pradesh (6 nodes) and Tamil Nadu (5 nodes)

Connection to this news: The Embraer-Mahindra partnership exemplifies the Buy (Global-Manufacture in India) route, with the proposed MRO hub and potential manufacturing line in India contributing to both Atmanirbhar Bharat targets and the Defence Industrial Corridor ecosystem.

Key Facts & Data

MoD RFI for MTA: December 2022; weight category 18-30 tonnes; 40-80 aircraft required
C-390 Millennium: Brazilian twin-jet transport; payload up to 26 tonnes; produced by Embraer
An-32 fleet: ~100 aircraft inducted from 1984; ageing and due for replacement
IL-76 fleet: ~17 aircraft inducted from 1985
India's MRO market: ~Rs 185 billion (2024); only 15-20% domestic
MRO policy reforms: 0% customs duty, 5% GST (down from 18%), 100% FDI under automatic route
Embraer-Mahindra strategic partnership: Signed October 2025
C-130J Super Hercules: 12 already in IAF service (alternative contender from Lockheed Martin)