Dear,
What you have said above is 100% correct, just like the way India operating 4 decade old stuff (read: mig21/23/27/29 & su27 variants) which are still better than what it's making for itself.
Their is no doubt in my mind that USA and Russia are far far ahead in aerospace technologies. USA/Russia sent manned missions to space in 60's, China is just beginning to breach that barrier. USA/Russia have been using Cryogenic Hydrogen-Oxygen engines since 70's, China has just breached that barrier and India is still trying to do so. USA/Russia made 4th Gen fighters in 80's, China breached that barrier with J10's in last decade, and India will breach that barrier this decade.
Yes, they are far far ahead, but the immense infrastructure, manpower and money being poured into R&D by China and India, not to mention the humongous population that both of these countries have, they are bound to cover the gap sooner than expected.
We are aligned with China to reap the benefits when that happens, and we try to keep our engineers in their mix, to guide them while they are growing, and to learn from them when they deliver.
Regards,
Sapper