For reasons best known to themselves, IAF has made it clear that they will not order too many LCAs.
The reasons are still the same, it's delayed and has still not reached FOC, with the lastest reports suggesting FOC only by June next year. So without achieving even the basic development goals and operational requirements of IAF, why should they order more?
More over, the 2nd squad will only be inducted by 2019, the time when the production of MK2 is meant to start, which again shows why it doesn't make sense for IAF to order more MK1.
IMO we should keep producing MK1s until the Mk2 is actually ready for production - that would mean about 100 mk1s in service.
We hardly will have the 4 x MK1s by mid next year, that was suppose to be delivered this year, which delays the production of 8 that were initially planned for the next year and only by 2016 the production peak of 16 can be achieved =>
2015 - possibly 8 to 10 fighters
2016 - 16 (total 24 to 26)
2017 - 16 (total 30 to 32)
2018 - 16 (40 + 6 to 8 additional, maybe N-LCA for IN)
2019 - planned production start for MK2
Wrt squad numbers, as often stated the aim was 42 squads till 2022:
Till the end of 2017
6 x sq Bisons
6 x sq Jags
3 x sq M2K
3 x sq Mig 29
13 x sq MKI
1 x sq LCA MK1
1 x sq M-MRCA (made in France)
=> 33 sq
Till the end of 2022
6 x sq Bisons
6 x sq Jags
3 x sq M2K
3 x sq Mig 29
15 x sq MKI
2 x sq LCA MK1
3 x sq LCA MK2
1 x sq M-MRCA (made in France)
3 x sq M-MRCA (made in India)
1 x sq FGFA
=> 43 sq
The Bisons will be phased out from 2022 onwards, while additional LCA, M-MRCA from the initial orders and FGFA squads will be added. Even if LCA MK2 production is delayed, the squadron strength will be close enough to the aim and with at least 3/4 multi role capable fighters, far more capable anyway.