You are correct with regards to JF-17 being (relatively) under-powered, but assuming that the future of aerial skirmishes in the Subcontinent lies entirely in the BVR domain, I don't see how that variable can't be offset by other variables such as swarm tactics, diversions, and radar jamming. Now I understand that the Rafale's powerful radar and Meteor missile would enable it to fire upon Pakistani targets while staying within Indian airspace, and it could pick off targets in Pakistani airspace based on data-link with Sukhois or Migs. If these front-line fighters encounter radar jamming a la 27th Feb, the Rafale would have a reduced battlefield picture at best.
The JF-17's maneuverability is its limiting factor but if its PL-15s and AESA radar can enable it to declare Fox 3 before the Rafale gets a shot off, then I don't see why JF-17s wouldn't stay behind the F16s.
In summation, assuming Pakistan aggressively jams the radars of Indian interceptors flying CAPs by the border, and if the F16s maintain closer proximity to their side of the border to deal with the Sukhois and Migs, the JF17s could (theoretically) be positioned further back and in larger numbers to deal with the advanced BVR capabilities of the Rafale. So you are correct in stating that until the JF17's airframe and engine are on par with the Block 52 F16s, the Vipers will occupy a niche of their own. But all of this is just a hypothetical scenario based on my opinions: one that does not take into account how India's supposedly revised post-Balakot aerial warfare doctrine will pan out.