Yes I agree with what you have written regarding HAL. That model of "every thing indigenous" failed because of various reasons one of them is tech. sanctions.
The engine tech has to do with metallurgy and efficiency, But the metal composition is one secret which no country wants to share as this tech is developed for years if not decades. But in Indian point of view, we have to buy this and absorb the tech and build from there to make those engines more advanced.
LCA is a defender of Indian skies, In times of war we need more number of home grown cheaper fighter jets which can be deployed at shorter notice. Reason why IAF is ready to induct LCA.
In my view LCA mark 2 will be a potent fighter with export potential. LCA will be upgraded to 4.5 or more, with the help from Russians and probably Dassault. There are lot of countries which will buy this fighter if India can speed up the process.