Skull and Bones
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Wasn't a big point of the MMRCA to reduce dependency on Russian imports?
That's the big reason why Russian planes weren't chosen, despite being arguably much more cost-efficient.
Russian planes comes with their own shortfall, MKIs have an availability rate of 55-60%, it would be much lower if Chinese are using their own engines. Rafale exceeds 80% availability rate, and that can be a crucial factor in a time of crisis. On top of that, no official claim stated that IAF is looking to diversify their portfolio, or they wouldn't have invited Mig-35 in the competition. It's all media statements. Mig-35 was discarded because it failed on few crucial parameters, and it's low powered engine.
Even Egypt discarded Mig-35s after evaluation, and went for Rafale. What does that tell you?