LMT is not foolish. F-16s are generation old planes i.e. much less in demand today. F-16's latest model Block 70 costs $105M a piece which is equivalent to 4++ generation Rafales and Eurofighters which try to compete with F-35s.
Moving F-16s to India will be more for spare parts and repair hub type scenarios. In addition LMT hopes to bag orders from India itself to replace aging Mig-21s in its fleet. This move is mainly to prolong the lifespan of F-16s line by bringing the costs down and keep it competitive.
