Gents - the Netra if I am not mistaken got FOC just the last year and hence is now established. Developing it to IAF specs took us almost a decade. This is the "capability" curve DRDO had to demonstrate, and now it has done so, expect further orders, provided the IAF and DRDO can zero in on a suitable platform.
From the IAF's POV, they are resource constrained. Going all in on indigenous capability, only to find it doesn't work out means they can lose conflicts. This is the fear they are always under. How can this be managed? Answer is budgetary. Countries like China bought Flankers, S-300s en masse, till local equivalents got ready. In our case too, something similar is what the IAF is proposing with the MRCA and then the MWF/AMCA. Its not easy though.
Because budgets are always limited with our huge social spends (which are still not enough), it means one or the other always loses out, and the indigenous option is usually the victim.
But what I am saying is people keep referring to corruption, lure for natashas etc. That's not the actual answer when the issue is more systemic. The lack of clearance for IAF to have a full blown engineering development organization, and the limited budget.
On the plus side, the DRDO's budget is steadily growing. Despite all the challenges it faces, its now at the $2 Billion yearly level. Thales R&D spend is around $1Bn Euro in its internally funded R&D (state/customer funded R&D will be additional). Tubitak Sage (Turkeys national R&D org) and Aselsan R&D spend add up to around a $ Billion. Again, even adding a buffer per other contracts, even taking out the recurring costs - manpower, etc for DRDO, the fact is that we are now inching towards the big leagues. DRDO's spend is distributed over far more programs, and hence its impact is reduced, because our manpower costs are low, and we are developing product after product, which is a very positive thing. For the IAF chief to openly state desi products can be procured and they are doing OK is not a small deal.
The key thing to do now is to infuse more accountability via service program managers especially in the production side (BEL, HAL, OFB etc), get them engineering program development houses w/at least project management tenures, and build up R&D spend on the manufacturing side (BEL, HAL, OFB). Aselsan for instance spends 33% of its Revenue on R&D, whereas BEL is at 9.4%.
While the private sector, especially MSME's need heavy financial and fiscal support in terms of eased liquidity to scale up, DRDO et al can provide a list of proven vendors. Also, by opening up procurement to private vendors, especially OFBs portion, you allow them to make enough margin to reinvest in R&D. Several already have.
On the AWACS side, the combination of substantial domestic and imported radar deployment plus IACCS basically means the medium, to high alt coverage over Pak is effectively managed even without AWACS (unless terrain gets in the way). AWACS are essential for low alt coverage and accompanying strike packages so they don't get surprised by low flying ambushers.