To give people an idea of the development times for 5th generation aircraft, a technically advanced country like Japan started its project for the X-2 demonstrator in 2009 and the assembly work only began in 2012 and the first flight did not happen until 2016. So that is 7 years for a first world country in its initial foray with new generation fighters (note that they have plenty of experience with building planes in house). Project AZM has just got its start and I doubt the 5yr timeline for a fresh design, unless that is what it exactly is ... a design. If they are talking about first flight, I would say 15yr mark seems very realistic.
Now, I think its better not to take the ambitious timeframe the air chief proclaimed, but look at the new AZM initiative to start building the technical knowledge, human resources and then finally industrial infrastructure needed for such a project. Right now as things stand, we can not even do the required R&D on JF-17 in terms of enhancements on the airframe etc. I remember some video on the the JF-17 project where the Chinese engineer being interviewed said the PAC was lacking all the updated machinery and equipment to produce the Thunder. We have now overcome that bit with the help of the Chinese but we still have a ways to go before we can be completely independent.
As most people here have pointed out, the most sensible route to take is to get on board with the Chinese and use their groundwork as a stepping stone in at least some form of coproduction for J-31. Rest assured that India will in the future get the F-35 and we need to maintain at least some sort of a qualitative balance given their modernization drive.