Like Adioz said, the three most important facets that come in mind are economic, Technological and Strategic.
But let me first start with a line which perhaps many of us have echoed,
NO ONE BECOMES A SUPERPOWER USING WEAPONS PRODUCED BY OTHERS.
The various countries that became super power in their era are
1. Greeks -- Hoplites (bronze armour and bronze weapons)
2. Macedonians - Sarissa and small shield.
3. Romans - Their ballistas, Gladius and scutum (sword and shield) and their fighting formations of Century and Legions.
4. Mongolians with their mounted composite bows and arrow.
So historically, those countries which became super power made and used their own weapons., They might have taken the design but they did not buy and use weapons from someone else and become super power.
India is at the crossroads where it now wondering what is more important, to ensure its security or to be a super power, and honestly both is possible. One of the most important aspects of being a super power is self reliance on domestic industry and technology and hence better and more investment in research and development.
India is at the doorstep to take the first step in becoming super power and the first step is to rely on its own products. In some areas we can buy weapons or technology, but these should not be so critical that their refusal makes us weak.
I am very much in favour of Mass producing Tejas Mk 1A, rather I have a different vision for India of my dreams. I want the Indian navy to also have land based Tejas squadrons which conduct reconaissance in the maritime zone of India and thus co-ordinating with the naval fleet as well as P-8 IN, thus allowing IAF to use its air assets more judiciously.
When comparing F-16 to Tejas
F-16 has a lot of advantages, firstly it product of many decades of experience of American Defence and Aerospace. They have billions of dollars of research and development, for India it will be difficult to make a plane like F-16 Block 70 at first try and that too within half a decade. since we have to develop out technology, that takes time (already has) We have developed Avionics like RWR, AESA Radar etc and even an Electronic warfare system. Thus we are almost getting there.
At a point due to lack of right numbers or export order Tejas might look an expensive plane, but that is because of all the knowledge that collected and indexed, this knowledge would then be used as basic to build on it various newer technologies, without such base we would always struggle to make a new plane. Thus as an Indian citizen and understanding how it goes, it would be better for GoI to not only induct Tejas Mk1A in IAF to replace MiG-21 but also use by Indian navy as Ground based Maritime defence and recoinssance plane. Remember among all our neighbours, we have the biggest coastline and also the one most susceptible to attacks. I would not be thinking of Mark 2 right now, for a simple reason is that let the users IAF/IN come with their list of improvements in the plane, since new technologies would be developed to upgrade Mk 1A, these technologies should then slowly but surely be incorporated into Mk1A, and almost after say one and a half decade, based on the improvements suggested by IAF, new plane can be developed or the base of Mk 1A used to further development of new version (Mk 2) or maybe a twin engined light MRCA (using two smaller engines so that the combined thrust is higher than the single engine of Mk1A, the idea should be very similar to F-5 which was built to be a simple and easy to maintain plane.
Thus even if Tejas Mk1A becomes expensive than F-16 (which is not possible as yet) it will be cheaper in the longer run (due to bigger orders and even export orders) but importantly it gives Indian aerospace industry the push that it requires to say that GoI will support a good project and see it to fruitition. In 70's then govt opted to purchase cheaper MiG-21 from Russia and it made economic sense, but how did it effect us? that even 3 decades after that we do not have our own fighter plane which can be used as back bone of Indian air defence. We became dependent on Russia, and France for planes and thus we ourselves closed the doorway of being super power and so here we are still dreaming of being super power and yet not having the guts to take a difficult decision of being self reliant. I would give you a classic non defence related example here. Pre independence, it was cheaper to buy English clothes in india as they were mass produced in factories of Manchester. And yet after the call was given for using Swadeshi, it created a new pride for India, people started to buy Swadeshi and Khadi to help self reliance, And this call was given by none other than Gandhiji, why have we forgotten this please? Don't you see how it changed india? People started to use Khadi and Swadeshi and that was perhaps the first step for self reliance and also for Independence., If the call for Swadeshi was not taken, then perhaps we would still be under british rule, or at least be a british dependency.
I know that F-16 Block 70 is an advance plane, but we have all the advance technology except the engine technology which we are in the process of getting and learning, its just a matter of time before we master the art of super alloys. Americans took a lot of time for this development and Billions of dollars, we are achieving the same in lesser time and lot lesser funds. F-16 and tejas are both 4th Gen planes, and at this point of time the Americans do not have funds to develop F-16, its at the fag end of its life. Though Tejas is in the same generation, the present cost of Tejas is much cheaper, and we can in a way be a super power and offer this small and cost effective planes to our strategic allies like say Vietnam, Malaysia, and other countries which could have a need for a small plane which they can fly regularly and be our true strategic partners economically and also militarily.
Strategic advantage is more for buying from America, but does it make sense to buy an outdated American tech for something which we already have developed. Would this be the cost of friendship? If Friendship is going to cost us self reliance, then that is not a friendship that we can have as that effects our self interest. we have done this mistake before in the 70s and if we do the mistake again, it means we have not learnt anything even after 4 decades.
I truly hope that GoI can take the bold step for self reliance and favour and support Tejas for being the backbone of IAF and IN. Tough decisions are difficult, but those decisions make super powers. And if we want to be super power within our lifetime, then the step has to be taken NOW, and the first step is inducting Tejas in big numbers.