I wouldn't go that far. I would say all this incident proves is the Russians only ever serve their own interests be this deal or back in 71 at the height of the Cold War when they made the Enterprise CBG back-off. I'd say India's only "true" freid was the Israelis who share a strong ideoligical bond with India and its people and are much more genuine than any other nation/ally.
Anyway wrt the 5th gen fighter- India shouln NOT abandon the project not only has it already invested BILLIONS in the project but there is NO other viable alternative for a 5th gen project. The PAK-FA/FGFA by all accounts will be the only 5th gen fighter from the current crop of projects that will be able to challenge the F-22s supremacy in the air-India can't afford to lose this capability. Additionally the FGFA/PAK-FA project is different to the Viky deal in size and scope and the Russians genuily need the Indians to get the project off the ground (no pun inteneded!) and there is expertise India is brining to the project. Simply India has no option but to stay the course with the 5th gen project- it is going to add significant expertise additionally to India's aero industery.
Have a read:
FGFA
But India can definetly scale back everything else ie the MTA which is STILL yet to go anywhere.
But If I'm honest I'd say Indian military cheifs had already taken these steps of "cooling-off" purcahseing from Russia, I am struggling to think of a single major procurment ongoing that Russia is either a geuine contender for or will win-the MMRCA,LUH,Heavy attack helo,heavy lift helo,MRH,N-LUH,AWACS (Next gen) etc it has either lost,will lose or was never in contention because the egency didn't want Russia involved. In short the Russians have cut off their noses to spite their face- they have literally thrown away 10s upon 10s of BILLIONS in USD.