Why though?" When you have the option to get an aircraft with a pedigree and track record , the 130
For which you can also read 'old'. The basic architecture of the C-130 is 56 years old already and while of course it is an excellent workhorse and proven, the modern twin turbofan or GTF formula will offer operating cost advantages if Embraer are to be believed. It will also be able to give a more rapid transit time which can be important to the military.
Yeah.. that's my thougts Pb. Pay for a huge build/acquisition with little market in a relatively crowded niche demand. US, Russians, Italians, Brazil and Japan? Seems a little optimistic to me. But who knows, perhaps Brazil with their "vibrant" economy has $billions lying around to fund a development lifecycle. I won't hold my breath however.
The global market for medium transports is potentially huge, just look at the C-130 for a prime example. I'n not sure why you are 'down' on Embraer/Brazil? From a standing start in 1968, through light aircraft and license build deals and moving onto their own designs they are now the 'Boeing' of region jet transports and also have a good military background to go with it. I greatly admire what they have achieved and I look at BAE over the same period and just think 'phht' (lower teeth against top lip and blow

)
As to rivals, only the Japanese C-2, which looks very similar and may even have informed the redesign of the Embraer IMO, is directly comparable.
The C-27J from Italy is smaller and shorter ranged and is also a 'heritage' design having begun as a VTOL transport project 45 years ago.
The An-70 is considerably larger and yes, more capable. I think this should have been pursued by Europe in place of the troublesome A400M but thats another story, it remains to be seen whether the noise issues of the propfan can be overcome to the degree that operations over populated areas are acceptable. If not that could be a major achilles heel to sales to smaller countries with urban airbases.
So yes, of course the C-130 is the haulage king, but there is no reason it HAS to stay that way, a transport fleet is a long term buy, maybe the newcomers are banking on air forces not wanting to be flying century old designs a few decades hence?