The economic reason being told is just a mask to cover the real reason for up holding the deal or canceling it for now.
1.6B deal did not meant the money is to b paid upfront, as such deals require money as the order is given, if we order for 50 JF-17 avionics and weapons, the deal would be half, once the first 50 ordered is paid, then comes the next payment, which is not out of our hand to pay if need arises.
The real issue is the Indian deal, as the tests are near to final stages and recently the news that 4 out of the 6 MMRCA contenders have failed the high altitude test, thus jeopardizing the chances of 4 contenders means only 2 are left and this new outcome suggests Rafale is among the ones which has passed the tests and has now a good shot at the MMRCA deal, plus the M2K upgrade deal is also in the pipeline. Don't take it as coincidence as it is not.
So the french put the deal on hold which has nearly been finalized and will see to the outcome of the Indian deal, if the French won, JF-17 avionics deal is sunk, if it doesn't, then the JF-17 deal may go through, similarly the submarine deal would go ahead too.
Do remember, the French aviation sector is in bad shape due to no successful sales of their Rafale so far, while their Naval sector is doing fine so far. Thus the emphasis would be to get the Indian deal, as it will boost their aviation sector which needs a good big order.