sancho
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It has been stated that the IAF has been offered the M88-3 and if so the IAF is likely to go for it. Much of the preliminary work is done but cost issues were hampering further development but now with confirmed deals and others on the horizon there should be no issues for integration.
IF the UAE had funded it, but that's not going to happen, since they acknowledged that the current engine has more than enough thrust and that the development cost would be too high for them, since France don't want and need it now.
IF IAF would want it, they have to wait at least 3 years for futher development and testing, but they want the fighter as soon as possible. Also the price for Rafale would be higher, which they don't want either, since it will be a costly procurement anyway and they will get the ToT that is needed if the Kaveri/Snecma developments starts.
There is not a single official source from Indian side that hints anything about increased thrust for Rafale, be it M88-3 or Kaveri / Snecma engine!