JF-17 vs LCA would be unfair to JF-17 in more ways than one. But as is the situation, JF-17 is better placed to serve the needs of uncomplicated forces of smaller countries.
LCA may be too much for them unless we also give a sovereign guarantee that the LCAs exported will be serviced properly and upgrade path is stated clearly. If these things are done then the LCA becomes a much better bet for the smaller countries. Much much better than JF-17 whatever block.
JF-17 is an relatively safe growth path for airforces that do not have to face pressing challenges to their countries like Sri Lanka or Bangladesh - not like India, a country that has never invaded anybody in its history, is going to invade them.
For India however, if this is true, then this should be a reminder about who/what/how we are today facing a situation that rank outsiders and strangers are supplying arms to people who have no threat from us, but we cannot. The Chinese should be thanking the IAF for this sale.