http://www.dnaindia.com/india/report_french-rafale-aircraft-out-of-india-s-mmrca-race_1248333
The IAF seems to be on a real bent to reduce their different platforms from the current six to only three for the future. That bodes well for the F-16, F-18 and MiG.
Their long history with the Russians, although rocky at times, seems a big factor. The requirement for 30% investment in Indian defense industries would be difficult for the US and the Russians are the most open about revealing their platforms.
Seems like the F-16 is a longshot because the Pak's have it too.
That report about the Rafale was denied by the IAF and Dassault later claimed it was a plant by LM.
About offsets, well US companies are not as disadvantaged as you claim-most major US players have begun partnerships with Indian companies for a range of systems. The Russians don’t have that much money to match that.