The last CAS said that the momentum for Azm came from the engineers (some of whom worked on the Saab 2000 recovery effort). But this was a good 2 years before they went ahead with it, so it was something else that drove the PAF to give the idea its due. Otherwise, they might have really put the next 20 years of funding on an import, as it was the same CAS (ACM Sohail Aman) who took a fresh look at the Gripen, Typhoon and Su-35.
In hindsight, the start of Azm was likely the final nail in the coffin of an off the shelf jet. We don't have the wherewithal to sustain both, Azm will need at least $300-400 m a year of R&D funding to be taken seriously. That's the installments of an off the shelf purchase.