Insas was an acceptable solution for the time. It used the best of three platforms, (AK, AR and FAL) to deliver on three specific requirements; logistics , reliability and operating cost.
>the 5.56 nato caliber is a cost effective, logistic easy, shooting friendly caliber. It's easier to shoot, has a sweet recoil impulse, weighs less and thus more rounds can be carried on person and shoots almost flat up to a good 300 yards and with iron sights its not that difficult to hit upto 500 yards.
> Insas derived heavily from the AK, (and not that I have anything against AK, I love AK's), but to keep the costs down the insas utilized same chrome lined barrel, same AK trunnion, same gas block, similar piston, similar notched hammer, similar trigger block, similar recoil spring, and similar stamped lower receiver. Internally the gun is 95% Saiga 5.56 auto rifle.
>IA at the time was convinced that it needs a gas block regulator as in fal and liked the left handed charging rod, and thats where insas got its gas block regulator and the charging handle location.
coming to your question on th using AKM as base pattern sure, there is nothing wrong with it, provided the system is developed like the Galil but OFB did not do that. Ak's have some inherent issues with full auto accuracy which is fine with 7.62x39 200 yard platform with iron sights, but when your engagements are at the 5.56's 400 to 500 yard ranges, you need a more accurate action, which does not have an offset reciprocating mass, in addition AK's trigger is not great for accuracy and Insas's is espepcially bad, with no discernible trigger reset and a very squishy pull .Insas also suffers for not having Good rails on the system (not on sheet metal stamped dust cover), poorly designed butstock comb, just look at regular soldiers and law enforcement, you will notice how poor the cheekrest for shooting position is.
I was excited with the MCIWS, which seemed like ARDE's attempt at making an Short Stroke gas piston on AR type rifle, so a Turkish MPT styled rifle derived from the HK416, and with 5.56 lower you would be able to swap uppers like 300 blackout, 6.5 gren, 6.8spc, 50 beowulf etc, but they bungled that up too. Indian Forces, not just the army, but all three services and paramilitary needs good, reliable and new generation of good quality firearrms which include small arms like assault rifles, long range sniper rifles, semi auto pistols, PDW's, full auto Carbines, urban sniper systems, DMR's, LMG' HMG's 30 mm multi purpose systems. I don't see OFB showing any intent on designing home grown world class alternatives to foreign systems, and what is even more painful that OFB is one of the oldest standing manufacturing organisations of India.
Edit: Long back when when Czechoslovakia was still one and a warsaw pact nation, kremlin shoved the AKM down thier throat. The pride in thier own small arms industry was such that they designed the VZ58, externally it looked like the AKM, but was nothing alike, an amazing rifle system which is quite hard to find in the civilian markets as they get gobbled up as soon as they show up. The czechs turned the AK design over it's head, with not one single part being interchangeable with the AK turning the VZ into a very short stroke piston, open bolt action rifle.
What do you think about new ofb 7.62 rifle ? Is it worth developing further..?