J7 technology was already old (1962 vintage) when they started producing them in numbers in China (late 70's, 80's) - because it was based on the Soviet MiG-21 F13 model (one of the very first early variants).
Since the F13, there has been significant changes in the subsequent versions, PF, PFM, R, SPS, M, MF, Bis and finally culminating with the Bison with glass cockpit, which the Indians operate.
During early 70's we operated the MF type, which was far more advanced than the F13 aerodynamically, but also heavier and more expensive. It used to make up the bulk of the IAF fighter inventory until they started falling out of the sky, at which point IAF upgraded some to the Bison version, which looks just like an MF version, except far better sensors/electronics, bubble canopy, spine tanks and wing fillets.
The Chinese tried to mass produce the MF version, but they deemed it too expensive to make compared to their J7 model. One can honestly say that they milked the lightweight J7 design for all its worth, culminating in a version with a proper glass cockpit, a better radar worthy of semi-BVR launches and even a double delta wing (ours). Well done!
They got rid of the J7 line the same reason why countries like Pakistan got rid of their J7's, they are unbelievably outdated against even some basic fighters, like say the Rafale or the Gripen. Heck even Tornados or EFA would give that thing a run for its money. But J10 will be another story.
But us getting the J7/F7 production line would've done scarce little other than basic experience on bolting together planes and testing them, like some other countries are doing. Not worth it. If we have to do THAT, why not do it with a far more current design and way better capability?
Pakistan's JF17 design was tailormade for that country to replace their J7s/F7s. India didn't succeed so well replacing their MiG-21MF's with their Tejas LCA, and had to shell out too much to get Rafales at the end.
