My takeaway is that India can use this as a means to get greater internal investment - every $Xm dollars a copter costa is not sent to US firms but becomes grist to the mill for Indian metalworkers, Indian engine manufacturers etc etc. Just keep the corruption out of the process and let the multiplier do its work.
But should it be seen like that? I guess they just think about uninterrupted supplies during war time and cost of imported labour.
1. Governments spending tax dollars should make efforts to keep the multiplier in their economy. For something like a hi-tech helicopter there will be a supply chain hundreds of firms long, many small and looking to grow and provide jobs.
2. India has an advantage (certainly compared to US purchases, maybe less to Soviet via China) in labour costs - building a helicopter to the "same" spec in India just costs less than in Ohio, and that means more copter for your rupee
3. Pretty much every government in wartime finds out its supply chains are borked - there is always a shell crisis. It's one reason the US armed forces are so effective - they have been in live wars for thirty years. No chance for a torpedo to be developed that simply does not explode.