INSAS fires a 5.56 millimeter round which was designed by technocrats in the late 50's or 60's as a cheaper and more effective way to fight an enemy.
Why? the 5.56 mm shoots to Injure an enemy when shot in the torso. That way more soldiers would be diverted to tend to the wounded. And removing the injured soldier from combat. who will die to internal bleeding if the bullet is not removed and wound sealed. Commanders can either hold their ground an dlet their men die or retreat and try to save them.
The 7.62 mm round obviously has more power.
I am by no trying to compare the INSAS to the M-16 but the Impact of the 5.56 bullet from a INSAS rifle is just as effective as that of an M-16 bullet.
And also the INSAS was made with the M-16 concept in mind.
so comparison between the M-16 and Ak-47 , Is just as relevant as the comparison between the INSAS and AK-47.
So why does the IA want the modern AK-47?
In the Vietnam war it took an average soldier 500+ rounds to kill a vietcong because of the jungle provided excellent cover for their guerrilla tactics.
The same is true for the IA insurgency problem. The rapid fire nature of the AK's where bullets are just sprayed, before retreating.
The accuracy based INSAS has trouble acquiring targets whilst the AK-47 simply involves spraying an area with bullets till you hit something which is more effective in jungle combat. and insurgency warfare.
The Majority of the problems are just Practical so they always be over come.
The oil problem however, i cannot comment on as there is not much detail provided on the problem.
IS it a design flaw?
a production flaw?
A quality problem?
A lack of proper cleaning ?
IF more info can be provided on the nature of the problem then a more educated guess can be made.
IF this is this big of a problem then the IA would have made more noise about it before, now.
Besides with the F-INSAS program kicking into gear, The INSAS MK1 rifle will be replaced anyway.
your first meaning full line in two pages ! 
