The government of India has clarified that the higher cost of indigenously manufactured SU-30MKI is due to following factors:-
Additional modifications are incorporated in the indigenous Su-30MKI to enhance the operational capability and to suit Indian   Air Force (IAF) requirements.
Being a Transfer of Technology (ToT) programme, cost is involved towards payment of license fee to Russian side.
Owing to the low volume of production of Indian SU-30 MKI as compared to Russian SU-30, economies of scale come into play.
Import of raw materials and proprietary components from Russia involves dependency on Russian Original Equipment Manufacturers (OEMs) for the offered kit costs, which are not proportionate with the kit contents.
But, indigenous manufacturing has created advanced skill sets in the country, a step towards self-reliance and will result in lower Life Cycle Cost and reduced dependency on OEM on repair & maintenance and faster turn-around time and quick support to IAF bases.