Just like Eagle says..the gradual development from Block 1 to 3 is already planned from beginning of the project. However what is not in detail now is how big the difference between Block 1 to following Blocks.

Independent commission has been put in Indonesia to assess the project with one of the topics that information on the difference between Block 1 and following Blocks will be quite substantial, that Block 1 can’t be upgraded later on to following Blocks.
For that, the commission give recommendation that participation to the initial batch (I presumed Block 1) will be limited on 1 SQ (16 fighters) only.

Again, I only read comment from Indonesian media, thus not have detail on how KAI plan on doing development stages. One thing so far, Indonesian participation as Junior Partner still on, but they are in negotiation on stages on development participation..which from what I heard related on development progression between various Blocks.

Initial agreement is for DI involved with KAI on Block 1 development..seems now Indonesian wants to negotiate also on how to progress on following Blocks.

The thing is that even between the Korean government, ROKAF, and KAI, the current KF-X/IF-X development program only covers Block 1 development. Nobody has officially sanctioned or paid for Block 2 or 3. So PTDI can collaborate for Block 2 and Block 3, but that has to be a sperate agreement.