Have long maintained that MRFA is nothing but a time-pass. And so is the next impending version of this tender, whatever it'll be called.
The real reason, which no one will say out loud, is simply that we don't have the the kind of money needed to procure 114 foreign 4.5 gen jets + cost of ToT & local production line.
The most viable way forward was always to just buy 36 more Rafales off the shelf, then put all resources toward Tejas Mk2 program which by this point has turned into an MRCA in it's own right comparable to F-21/Gripen-E.
The only outstanding requirement that Mk2 couldn't fulfill was of a DPSA with long legs. Two more squadrons of Rafales would have been enough to plug that hole, especially when supported by Loyal Wingmen & Rocket Forces which weren't part of the pictute before. Everything else that MRFA was needed for, Tejas Mk2 can manage just fine (including Deep Strike on Western front for which we don't need much range, allowing us to divert the Ambala squadron of Rafale to LAC as well).
Now unfortunately it seems even that 36 off the shelf order is becoming unviable due to timelines brought on by UAE's 80 jet order and supply chain issues.
We're stuck between a rock and a hard place. If we're smart, we need to convince MBZ to divert 36 of their production slots to us as UAE isn't facing immediate threats on their borders like us. Modi has built up a good strategic & economic relationship with UAE so it's possible.
I'm still wondering what this means for Navy's Rafale-M deal though.