US has always been willing for talks but since we already signed on for the PAKFA and AMCA, the IAF felt like the F-35 would not be needed. With PAKFA for India now heading to a slow death, actually the F-35 makes more sense. With AMCA coming up mid next decade, the F-35 would be an ideal co partner for AMCA.
LM would sell the F-35 in a heart beat and so would the state department. Heck having the F-35 A, B and C makes more sense to me than buying Rafales or SH for IN or current Falcon VS Gripen E SEF.
Ideally, if we order 90-100 F-35A for IAF as part of the SEF, 40-60 F-35C for IN to be used on IAC-2/3 and around 40 F-35B to be used used from shore and as well from the 4 San Antonio class LPDs. We would then be looking at roughly 200 fighters. With such a large order, we'd have the largest order book outside the US, we can surely have local assembly, some basic or even decent TOT and we'd end up being the key location for global supply chain especially for all future customers in Asia/Middile East for MRO etc. This way both IAF, IN needs can be met with a 5th gen fighter. Ordered next year or in 2020/21 after trials, LM could begin deliveries by 2023/24 and local line would end up churning out the remaining orders over a period of 8-10 years.
Keeping in mind we won't sign current or future versions of CISMOA that we consider to be intrusive, The Indian F-35 will end up having a lot of local items as well including datalinks, IFF, Comms etc. Also I can see a lot of Indian weapons being integrated onto it from Garuthma Glide Bombs, SAAW bombs, Astra Mk-2. Existing weapons in stock like Paveways, Griffins, Spice, Meteor etc would readily deployable from the F-35 by then as well.
The timelines anyways are focusing on mid next decade and the F-35 would be the best bet.