the answer is simple,back in late 80s,probably around 87-90 indian planners desired a higher degree of self reliance in terms of propulsion hence they decided to go ahead with the development of gas turbine all on their own.
Which is fine when you have at least a bit of know how and experience in the field, but when you don't it's just plain stupid to combine a fighter development with the engine development and making the one dependent on the success of the other.
Secondly back in late 80s when this program was undertaken and even now india is much more prone to sanctions than swedes.
But only from the US, we didn't had any issues during sanctions with supply of weapons or spares from Russia or France, that's why it was more than a valuable chance to go either with one of them for a joint development (Shakti engine like for starters), or to take one of their engines off the shelf and develop Kaveri independently. But DRDO, not IAF prefered the US partners and DRDO not IAF decided to go for an Indian fighter with so many core developments with high risks (engine, radar FCS).
In fact, IAF back then wanted additional Mirage 2000s, so we could easily had get a deal for additional once + the licence production of the engine for LCA too and same would had been possible with the Russian engine, that we also assemble at HAL in it's core version for the Mig 29. So not the lack of options, nor the risk of sanctions was an issue, it was just highly naiv planing of DRDO and overstimation of their own capability.
According to GTRE's own research engineers,the metallurgy of russian engines is still a GENERATION behind that of latest western GTs
So what? The priority was to get IAF a new Indian low end fighter and only because GTRE wanted to develop something on a level with western counterparts, doesn't mean they have the capability to do so. This thinking within DRDO that they and their products are world class is one of the main issues and why they always aim too high and make things far too complicated. The nation would benefit far more from DRDO, if they stick to easy and low end developments that are realisticaly accoring to what they actually can deliver.
We don't need AMCA on the high level, we need LCA on the low end, in numbers as soon as possible!
We don't need AWACS India on the high level, we need more EMB 145 DRDO AWACS on the low end, in numbers as soon as possible!
We don't need an indigenous AESA for LCA around 2020, we need a working puls doppler radar today, for around 100 Jags and 40 LCA MK1s!
DRDO must start to re-think and focus on making things simple and deliver the basics our forces needs, only then they can aim higher and on exports. If they don't delays and development failures will remain in future, just as the dependance on imports.
@sancho
The links I have posted clearly support my statements
I know, but you are talking about the time when the US engines were procured, the concept, design and development of the fighter however started years earlier 1980s/90s and had an indigenous engine as the base.