You are right the LCA will be using a GE engine until they get the Kaveri engine sorted out. It is a lesson learnt nonetheless. It is about time the aeronautical industry was privatized so as to incite healthy competition and collaboration such as that displayed by Lockheed, Boeing, NorthorpGrumman etc.
I am more than confident about our ability to produce great jets (military and commercial) given that the process is highly dependent upon computer modelling, simulation and high level programming... all the things we excell in.