From a clean-sheet perspective, Gripen E/F would've been a compelling acquisition, however at the time it was considered it was still a developmental aircraft which did not enter squadron service until 2022. Plausibly that development schedule could've been compressed somewhat if India had in fact opted for it, but the point remains. Gripen C/D was the "mature" solution available and one major problem is that it clearly trod on the toes of LCA, which was not then expected to be decades away from delivering a useful capability.
In terms of acquiring a relatively modest and affordable western combat aircraft to sustain the inventory, the real missed opportunity in my view was in not doubling (tripling, quadrupling) down on Mirage 2000 in the late-90s to mid-2000s as Dassault was winding that program down in favour of Rafale. One can somewhat appreciate why it didn't happen, in that the timelines more-or-less overlap with those of Su-30MKI and state resources were limited, but in hindsight it was a mistake.
In an alternate reality where India did go down that path, IAF could today plausibly be operating hundreds of domestically manufactured M2Ks, with extensive ongoing domestic industry involvement in upgrade pathways executed at economic order quantities, with further production batches readily substituting for delays in LCA, declining availability of MiG-21, MiG-23/27, Jaguar, etc. And as an older program that was being superseded, Dassault may have been considerably more accommodating in relation to ToT and the like than they were and are for Rafale. Of course these are suppositions and one does not in fact know how the terms under which Dassault was willing to deal. It's possible that they may have been such that, on detailed examination, the prospect was unattractive. But given that Dassault was otherwise faced with the prospect of wrapping up the M2K production line without further returns, they surely would've been incentivised to negotiate in good faith. And on the Indian side of the equation, the evidence of recent decades provides little basis to think that the non-decision on M2K was the product of careful and thorough analysis and a robust decision-making process.
