interesting move.
if done by india, then they lost the bargaining advantage.
if done by france, then a clever move to hook IAF to the planes. For the 36 planes, IAF would definitely need some kind of infrastructure which probably is not included in the plane cost, once IAF invests in to that (which is not going to be cheap), IAF would essentially close other doors on it, because after the initial investment on the infrastructure, buying more jets would "seem" cheaper even if the make in india deal for 126 (or whatever final number) is more expensive.
anyways congrats to IAF, 144 4+gen spanking new jets will make it very strong.