India is considering an innovative defence barter deal with Brazil that could see Embraer’s C-390M Millennium transport aircraft acquired in return for the export of Tejas Mk1A light combat aircraft and Akash air defence missile systems. According to sources, the proposal is still under discussion and reflects India’s broader strategy of combining defence imports with export opportunities while minimizing direct financial outlays.
The proposal comes as India moves ahead with its Medium Transport Aircraft (MTA) programme after receiving Defence Acquisition Council (DAC) approval to procure 60 new transport aircraft to replace the ageing An-32 and Il-76 fleets. An official Request for Proposal (RFP) is expected soon, opening the competition to global manufacturers.
The C-390M Millennium is regarded as one of the leading contenders for the programme, provided it fulfills India’s operational and industrial requirements, including a 60% local content threshold under technology transfer (ToT) provisions. Meeting these conditions could pave the way for the barter-based procurement model.
Brazil has reportedly shown interest in purchasing 36–40 Tejas Mk1A fighter jets to modernize its air force by replacing ageing F-5 aircraft. The country is also evaluating India’s Akash air defence systems, including the next-generation Akash NG and Akash IS variants, to enhance its surface-based air defence network.
The proposed arrangement would allow each country to support its domestic defence industry by placing orders with national manufacturers—HAL and BDL in India, and Embraer in Brazil—while offsetting procurement costs through reciprocal acquisitions. If concluded, the deal could become a milestone in India’s defence trade policy and serve as a blueprint for similar agreements with other nations.
Despite its potential, several challenges remain. One of the most significant is securing a stable supply of GE F404 engines for the Tejas Mk1A, as production has already been affected by delays in engine deliveries. Ensuring sufficient engine availability will be essential before India can commit to large-scale exports.
Other factors influencing the agreement include Brazil’s assessment of long-term maintenance, training, and lifecycle support for the Tejas and Akash systems, while India must evaluate the C-390M’s payload performance, operational range, and integration with its existing airlift infrastructure before making a final procurement decision.
