Jakarta. Indonesia has received its first shipment of around 1,000 pickup trucks from Indian automakers Mahindra & Mahindra and Tata Motors, marking the start of deliveries under a controversial $1.5 billion vehicle procurement program, a business executive said on Tuesday.

The vehicles are part of a broader order of 105,000 pickups and trucks imported as completely built-up units by state-owned agribusiness firm Agrinas Pangan Nusantara. The fleet is intended to support tens of thousands of rural cooperatives launched by the government earlier this year.

The imports have drawn widespread criticism from lawmakers, automotive industry groups, and analysts, who argue the program sidelines domestic assembly plants and violates minimum local-content requirements.

Agrinas CEO Joao Angelo De Sousa Mota said shipments began after the company paid about 30% of the total contract value.

He rejected claims that Agrinas ignored domestic manufacturers, saying the tender required four-wheel-drive specifications that local producers could not meet at competitive prices or in sufficient volumes following an open bidding process.

“So I think sourcing these vehicles from India is fair. We gave everyone the opportunity, and it turned out our domestic producers simply could not deliver,” Joao said.

During the procurement process, Agrinas invited several manufacturers to participate. For pickups, bidders included Toyota Hilux, Isuzu, Mahindra, and Mitsubishi, while six-wheel truck tenders involved Isuzu, Hino, and Foton.

Joao said negotiations showed domestic suppliers could provide only about 45,000 units in total — including 20,600 Mitsubishi Fuso trucks, 13,500 Foton Aumark units, 10,000 Hino trucks, and just 900 Isuzu Canters — far short of Agrinas’s 105,000-unit requirement.

The supply gap ultimately led Agrinas to source vehicles from India, he said.

Pricing also played a decisive role. Joao said manufacturers with factories in Indonesia failed to offer competitive terms despite the large order volume.

“If we can get something stronger and cheaper, why should we buy something weaker and more expensive?” he said.

Earlier this month, Mahindra announced it had secured an order for 35,000 single-cab Scorpio pickup trucks from Agrinas — described as the largest export order in the company’s history, surpassing Mahindra’s total vehicle exports for all of 2025.

Under the partnership, Mahindra and Agrinas aim to equip rural cooperatives “with robust, reliable vehicles to ensure effective and seamless flow of fresh supplies from farmers directly to the marketplace,” helping villages become independent centers of economic growth.

“The volume committed for this partnership will significantly boost our international operations, adding as much as our total export volumes achieved in FY2025,” said Nalinikanth Gollagunta, chief executive of Mahindra & Mahindra’s automotive division.

Agrinas has secured Rp 200 trillion in financing from state-owned banks to support the development of 80,000 rural cooperatives. So far, Rp 90 trillion has been disbursed, with more than 30,000 village cooperatives already established or currently in formation across Indonesia.