Sorry for the basic question but have contracts really been signed? Has work started? I never know with this project its kind of going on for two or three years now.
On one hand I'm Mirage fan I can see spending the money and doing the upgrade you have the frames.
On the other hand it's like an old car yes you can find the parts and fix but its still an old model. If your going to buy 126 new aircraft you might as well go all the way and go new. Maybe with the saved money buy a few more directly from the builder which is the route I think India should go with anyway.
I always like to start basic what will your enemies be flying and go from there.
China mostly likely some form of a J-10 Block-II, J-11B, Su-30MK.
Pakistan Block-52 Vipers, hopefully 36 or less because I wouldn't sell them another one that's for sure, some form of J-10 as well. It strange I may be wrong but I just feel the JF-17 project is not going to work out. It would help them replace J-7, Mirage ROSE, but just don't feel China going to come through on their end unless for some reason real FC-1 request come in.
For its size fuel load, weapons load, the Mirage 2000 comes up a little short and because of its size it lacks future. I think the days of older type aircraft types carrying over and being useful are over in modern combat. Its a dead model meaning the maker isn't producing more. Instead of spending more on a dead end type use them the way India uses their Mig-21 and move on.
In mock fights and training Mig-21 bison are useful but remember the fighting or training is in a set block of sky. Put 4 missiles on it and go military speed a few times and there be looking to land pretty soon with bingo fuel, at least using the Mirage 2000s in this role India will get more out of them.
Its just time to move on any real fighting using this platform Mig-21 must take place close to its base. I would only do mid level upgrades on the 40/50 Mirage 2000 India has and just replace then Mig-21 straight up. Doesn't the AA-12 have more range then the radar that's in the Bison anyway or close to it? Replacing the Mig-21s was basically how the aircraft bid started anyway right and then kind of grew a little.
Can't wait until finally makes a choice on the aircraft 126 purchase bid.