As often discussed...
...IAF don't want overdependance on Russia, that's why they want indigenous or western alternatives to the MKI and FGFA
...Flankers (no matter which once) are heavy class fighters, Rafale is medium class
...after the upgrade the MKI will be at least as capable if not more (depending on customer requirements), since a lot of the changes will be the same. We already know that Samtel is offering bigger MFDs for the upgrade, similar to what the Su 35 gets, we know that DARE hase developed a new EWS, which includes UV MAWS, LWR and new jammers (most likely at the same wingtip pods that the Su 35 or other Flanker uses), we know that a high focus will be placed on the addition of RAM coatings, to reduce the RCS, while it's doubtful that IAF will remove the canards for benefits in this area, like the Russians did. We also know that the long term aim is, to replace Russian weapons with indigenous once, R27 and 77 with Astra, KAB bombs with Sudarshan, Kh 31 with an own ARM..., Brahmos will only be one addition to the list, that also is mainly aimed on our requirements.
So except of the engine, there is nothing a Su 35 will offer to IAF, that the upgraded MKI won't have, it will be in the wrong class to be an alternative to Rafale and most importantly, is not what IAF wants! Only Russian media, Sukhoi officials that are desperately looking for exports of the fighter and forumers are talking about it wrt India.