This is what anyone with knowledge says. It is exactly what I said above:
Here is the source (Ajai Shukla):
Air force to get full Sukhoi-30MKI fleet by 2019
Walking along the Hindustan Aeronautics Limited (HAL) production line at its Nashik plant is a good way to realize how gargantuan the Sukhoi-30MKI fighter is. Yet, its sheer size, the sleekness of its lines and the menacing “bird-of-prey” droop of its nose are not why this fighter is the backbone of the Indian Air Force (IAF). The Su-30MKI is pure performance --- it is astonishingly agile, a favourite in aerobatics displays; and its 8-tonne armament payload makes it a formidable multi-role aircraft. It has the missiles to protect itself while flying on a mission, the bombs and rockets to comprehensively pulverize a target, the electronics to deceive enemy radars, and can return home while warding off enemy fighters.
The IAF is keen to quickly induct the 272 Su-30MKI fighters it has on order, especially since the Rafale contract remains uncertain. But HAL --- which delivered an impressive 15 fighters last year --- says completion would be possible only by about 2019, a two-and-a-half-year delay from the 2016-17 target that was set when the contract was signed with Russia in 2000.
A total of 222 Su-30MKIs are to be built in Nashik. Till date, 149 have been delivered to the IAF. HAL will have to continue building 15 fighters per year to deliver the remaining 73 aircraft in 5 years.
The delay stems from the IAF’s wish to make the Su-30MKI the high-performance fighter that it eventually turned out to be. Unsatisfied with the Su-30 initially supplied by Russia, the IAF demanded improved aerodynamic performance. Russia added canards and a thrust-vectoring engine, the AL-31FP, which could push the fighter in multiple directions, adding agility. All this took time and Sukhoi transferred the technology two-and-a-half years late.
Business Standard was granted access to HAL’s Nashik division, the birthplace of multiple Russian fighters that have given teeth to the Indian Air Force (IAF) since the 1970s. This factory was set up in 1964 to build the MiG-21 E7FL, now retired, followed by another variant, the MiG-21M, then the MiG-21BIS. Later, HAL Nashik built the MiG-27, and then upgraded 123 MiG-21BIS fighters into the BISON, which is still in service. Finally, it upgraded 40 MiG-27s, an entirely indigenous upgrade that has kept the aging fighter in service till today.
HAL’s Nashik unit is still called the MiG Complex --- ironic, given that it builds a Sukhoi fighter, the greatest rival of Mikoyan, builder of the legendary MiGs. The Su-30 variants, Russia’s most successful recent design, have wiped out Mikoyan from the global marketplace. Compared to some 800 Sukhoi-27 and Sukhoi-30 variants bought by the air forces of Russia, China, India, Ukraine, Malaysia, Algeria, Eritrea, Ethiopia, Indonesia, Kazakhstan, Uzbekistan and Vietnam, only a handful of MiG fighters find customers today.
Yet India remains a Mikoyan loyalist --- of sorts. The Indian Air Force (IAF) is upgrading its fleet of 60-odd MiG-29S fighters; while the Indian Navy has bought 45 MiG-29K/KUB fighters for its aircraft carriers, a $2 billion purchase that has breathed life into the fading Russian company.
Yet this is small change compared to the massive order of 272 Su-30MKIs, which started out as a bargain at $30 million apiece, but which are now priced at $75 million each.
Business Standard spoke to HAL officials to find out why prices have risen despite an ongoing indigenisation programme that has met all its targets. The reason, it emerges, lies in the nature of the manufacturing contract signed with Sukhoi, which was to see a progressive enhancement of Indian content through four phases. Yet, even though Phase IV has recently been achieved, this provides for only limited indigenization. While Sukhoi was bound to transfer technology for building the fighter, the contract mandates that all raw materials --- including titanium blocks and forgings, aluminium and steel plates, etc --- must be sourced from Russia.
This means that, of the 43,000 items that go into the Sukhoi-30MKI, some 5,800 consist of large metal plates, castings and forgings that must contractually be provided by Russia. HAL then transforms the raw material into aircraft components, using the manufacturing technology transferred by Sukhoi.
That results in massive wastage of metal. For example, a 486 kilogramme titanium bar supplied by Russia is whittled down to a 15.9 kg tail component. The titanium shaved off is wasted. Similarly a wing bracket that weighs just 3.1 kg has to be fashioned from a titanium forging that weighs 27 kg.
Furthermore, the contract stipulates that standard components like nuts, bolts, screws and rivets --- a total of 7,146 items --- must all be sourced from Russia.
The reason for this, explain HAL officials, is that manufacturing sophisticated raw materials like titanium extrusions in India is not economically viable for the tiny quantities needed for Su-30MKI fighters.
“For raw materials production to be commercially viable, India’s aerospace companies would need to produce in larger volumes. That means they must become global suppliers, as a part of a major aerospace company’s global supply chain. Licensed manufacture for our own needs does not create adequate demand,” says Daljeet Singh, HAL Nashik’s manufacturing head.
Still, HAL builds about 10,000 of the 30,000 fabricated components in each fighter. A significant percentage of this is outsourced to private sector vendors in aerospace hubs like Bangalore, Hyderabad, Chennai, Pune and Coimbatore.
Once the last of the 222 Su-30MKIs to be built in Nashik roll off the lines, this facility will build the Fifth Generation Fighter Aircraft (FGFA), which HAL and Sukhoi will jointly develop. An estimated 214 FGFAs are planned to be built here.