Disclaimer: There is no hard and fast rule as which one is better, it completely depends on you what you expect from yourself at the end of your post-graduation.
The following answer is given in the context of Indian education system:
First of all you must understand that not all colleges give MS and M.Tech degrees for all of their disciplines. For example, I know for sure that IIT Delhi, IIT Madras and NIPER Mohali give MS degree for some of their disciplines. All other IITs have only M. Tech courses.
So if you are constrained for some reason that you have to study in Mumbai, then IIT Bombay provides only M.Tech degree.
Now comparing both degrees:
Similarities in MS and M.Tech:
- Both MS and M. Tech can pave the way for a PhD.
- Both degrees require taking a certain amount of coursework followed by research work.
- M.Tech is defined to two years. Extension of six months is provided if course work or thesis work is pending.
- MS generally is from 2 to 3 years, since the amount of stipend for MS is given upto 3 years (at least in IITs). I have seen candidates working for their MS degree even upto 4 years (of course, without stipend).
- Generally MS is supposed to be more oriented to research than M.Tech (it depends on the student and guide!).
- During placements many companies assume that MS is equivalent to MSc, giving a big disadvantage to the candidate. In our college we had to convince companies that MS is equivalent or even more superior to the M.Tech degree. Please don’t assume that this was an isolated case. The misunderstanding exists with many companies. The reason is that MS is offered only by a handful of colleges. M.Tech is comparatively well known.
Depends on what are your past qualifications. Graduates from IITs and NITs normally do not prefer to do M.Tech as they get better job offers with their B.Tech Degrees itself. IMO MS is a better option as it gives you better exposure. But here also your GRE score and University you are getting becomes important. MS from a good university may get you land up in a good Job in U.S. If you have research interest then you may also pursue Phd from any good university there itself.
On the other hand with M.Tech you mostly land up in an average job which sometimes may be as good as what you get after your B.Tech and sometimes it may be even worse.
Mostly jobless people or those from average undergrad institutes pursue M.Tech. Seldom you find people picking up M.Tech because of research interest. Only advantage of M.Tech over M.S is the low cost of course. So if you have financial issues and you have a keen interest in research then you may pursue M.Tech from IISC or old IITs.
So in conclusion, if you desire to go for a PhD, you should pursue MS as it trains you perfectly for the role. But M.Tech even though is sufficient for employment, can also lead to a PhD eventually.