I have a 1TB Western Digital My Passport (a USB-powered drive) formatted as FAT32 + an OTG cable. It works perfectly fine, but not if the drive is NTFS. If rooted (which I am), you can supposedly use NTFS with the aid of some apps, but I havent tried it personally (worked on my old Acer A500 though, so I cant see why it wouldnt on our tablet).
EDIT: I just tried a thumb drive formatted as NTFS and the Android system wont recognize it, as suspected. Unfortunately, I tried 2 free NTFS mounting apps from Play Store and neither worked. It's still theoretically possible, but maybe not for 4.3 or just 4.3 for now. As I said, I did it all the time on my old tablet, but it was running 4.0.3 ICS, not 4.3 JB.
(I also used to use an APK found somewhere here on XDA. The app wasnt on Play and I cant find it now. Search around on Google and you may be able to find it or something similar.)
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