For decades since independence in 1947, India had primarily relied on Soviet arms with the exception of buying Jaguars and relevant technology during Morarji Desai's leadership. After the breakup of the Soviet Union during Yeltsin's infatuation with the West, India bought some French Mirage 2000s and German HDW submarines. Since liberal economic policies were instituted and foreign exchange reserves have ballooned, India has started looking at other suppliers, often in the West. Another reason has been the delays in supply and poor quality spares due to the economic and political troubles of Russia. The availability of more sophisticated electronics from Israel is another factor.
For many years now, Israel has been supplying over a billion dollars worth of arms every year to India. The purchase of Green Pine Radar, Barak anti-missile system, Elbit avionics, night vision goggles, sniper rifles, precision ammunition, Spyder air defense SAMs and UAVs from Israel, fire locating radars, USS Trenton, Sea King helicopters and C130 J transports from America, Scorpene submarines from France and Hawk jet trainers and Fennec helicopters from the UK are evidence of a diversification of suppliers.
Russia still remains a major supplier and has supplied Krivak warships, submarines, T90 tanks, Kamov and Mi helicopters, multiple rocket launchers, SU30 MKI planes and various missiles including AAMs, SAMs, ASMs, and anti-ship and anti-submarine missiles. The two countries have jointly produced the Brahmos cruise missile and have inked agreements for nuclear submarines and joint production of medium range transport aircraft and fifth generation MRCAs. The present dispute is about delays and upward negotiation of costs for the Gorshkov carrier and more SU30 MKIs.. The reasons for the dispute are the falling dollar and Russia's strengthening economic status with practically eliminated foreign debt and burgeoning reserves due to the high price of oil.
The unmentioned, but more important political reason is the glaringly obvious and obsequious embrace of America by the current Indian administration. Russia doesn't care so much about the acquiescing to the referral of Iran to the UN Security Council, nixing the Iran gas pipeline and the humiliating acceptance of the civil nuclear agreement meant to bring India into compliance with the NPT and the CTBT by the back door, as much as what they reveal about the Indian administration's lack of backbone and resultant leaning inclinations. As a shot across the bow, Russia reversed itself from the earlier decision to ban the export of Chinese jet fighters with Russian engines to Pakistan and asked for more money from India to fulfill the SU30 MKI contract and Gorshkov refitting and postponed the dates of delivery. The arm twisting is meant to ensure that India heeds the warning and hopefully chooses the MiG 35 for the pending new 126 MRCA contract. The problem is that Russia itself does not use MiG-35s and it may only be a slightly beefed up MiG-29.
Russian arms manufacturers have less big paying clients than their US and European counterparts. The US military itself is a big bulk buyer of US arms and its allies like Japan, Australia, Turkey, the new East European NATO members and client petro-states in the Middle East purchases allow US arms manufacturers to sell enough numbers to profitably develop and market their expensive high-tech ships and planes. The old Europe EU members like the UK, Spain, Germany, Italy and to a lesser extent France jointly develop ships, submarines and planes. Russia's big clients are mainly China, India, Iran, Syria with a smattering of small orders from Malaysia, Indonesia, and the left leaning Central and South American states. It lost a big client in Iraq and will be hurt if it loses the majority of Indian orders. In fact it has not deployed or completed many of its advanced arms and has spent its money on modernizing its nuclear weapons to get a bigger bang for its buck, a smart lesson that India seems unwilling to learn.
A few years earlier during its weak phase, the Russian foreign minister had suggested a Russia, China, India alliance to counter the unipolar US dominated world but the suspicions between China and India made that unlikely, so Russia has put its shoulders in the service of China's SCO. Just as Russia punished belligerent Ukraine and Poland by demanding market prices for its gas and building Western Europe supplying pipelines bypassing Poland and Ukraine and scored a coup when Turkmenistan and Kazakhstan chose energy transit through Russian pipes rather than the Baku-Ceyhan pipeline and Uzbekistan closed its American base, so now it is demanding higher payments from India for previously negotiated arms deals.
India is not an essential ally, necessary for Russia's geo-strategy, but would be a major disadvantage for it if it joined the American enemy camp. The same thinking holds true from the US point of view. India's three largest trade partners are the US, China and EU and it also is better off retaining a flexible independent status. It has tried to get the best of both worlds by buying cheaper and sturdier Russian planes like the SU30 MKIs and equipping them with more advanced French and Israeli avionics. This policy should be continued while keeping the US happy with a small order of Super Hornets with Raytheon AESA radars and the new maritime reconnaissance, anti-ship, anti-submarine aircraft from Boeing and the newer HDW submarines from Germany, while dividing its civilian aircraft orders between Boeing and Airbus.
If India chooses an American firm for the bulk or all of its MRCAs, it maybe perceived as a major break by Russia and lead it to reassess the entire relationship. It would also mean an additional burden for India in servicing a totally new platform for which it has no expertise or facilities. It has already licensed the Russian RD33 engine used in the MiG29s and MiG35s. Since the Indian pilots have received carrier landing training from the US, a purchase of 25 Super Hornets would be a fair tit for tat and they could be used on the third aircraft carrier that India is already building. The US technology could predominate in its naval aviation and meld smoothly together in its carriers and maritime surveillance aircraft.
If India chooses to order all Russian aircraft, the US and its aircraft manufacturers with their short attention span, instant gratification psyche and the still prevalent Dulles philosophy of 'you are either with us or against us', will jettison India from their future plans and strategy. Bad though this is, it could be worse if India signs the civilian nuclear treaty under the Hyde Act restrictions. Then India will become a permanent client state of the US with no independent foreign policy or nuclear deterrent. It will seriously antagonize Russia and China and will suffer the same recurrent fate as Pakistan, that of abandonment after a specially contracted Shia marriage, which lasts just a little longer than the attainment of orgasm by the dominant of the two parties. In a few months the world will know if India can be coy and prudent or will it knuckle under and sign a humiliating nuclear deal and buy only the outdated US planes and cause some other radio Neanderthal to lose his job for describing India in the words of a rap song!