There's a lot of incorrect information floating around.
IAF wanted to support the industry from day 1. They created their ASR in just 2 years after the go-ahead. But DRDO actually threw the IAF and their ASR out and created their own new jet instead.
The original LCA was supposed to be a simple aircraft with hydraulics, not FBW, and a simple radar in the same class as the Thomson-CSF RDM with the ability to track 2 targets. ADA changed the specs to FBW, multimode radar, BVR capability etc in the early 90s.
ADA officially told the IAF not to interfere in the project and booted them out. That's the kind of support the IAF received. IAF was allowed back in once they realised they are not going to meet the 2008 objective and they needed user input on core electronics. The IAF has been bashed for all the wrong reasons. With IAF assistance, in 2010, the ADA got the govt to change a bunch of rules and laws and pushed the LSPs into prototype development instead of handing the jets over to the IAF. Many people are not aware of this.
As for this Mk1 and Mk2 hoopla:
From the specs we have seen, the Mk1A will have superior performance compared to AF-Mk2 version 1. The Mk1A is lighter than the Mk1 by 800Kg and can be equipped with the early, original version of Kaveri, but with newer materials for additional thrust. The Mk2 V1 has similar weight as the Mk1, has a higher thrust engine, slightly longer fuselage for avionics and only 20Kg increase in fuel, yes, only 20Kg. The drag is lower by 8%. Mk2 V1 requires a modified version of Kaveri with a new French core or the F414. With the exception of a lack of internal ECM, the Mk1A beats the Mk2 V1 comfortably.
Now, there's a new AF-Mk2 V2 which is 1m longer, has extra fuel and a modified Kaveri. There's talks of addition of canards or LEVCON, we are not sure since the design is not yet frozen. The MTOW could cross 16T. So it's basically a new aircraft.
In other words, the Mk1A is the new Mk2 and the Mk2 has become the Mk3. These are not the official designations of course, I am referring only to technical characteristics.