Well, unless the Indian journalists get more inquisitive and more directly ask their government this, we're left with educated guesses.
But some facts are that India is still a market 4.5 times smaller than China in terms of airliners. And China is pretty much the only place in Asia where Airbus and Boeing have seen fit to open local assembly factories for their (narrowbody) airliners. (Airbus in Tianjin in 2008, Boeing much more recently in 2018. Also, Airbus assembled some 5-600 planes there. The scope of the Boeing plant in China seems to be more limited to "finishing work".) China also has more of a domestic competition with the Comac C919 and ARJ21, so that may have played a role in those Western decisions as well. (Despite Airbus' local presence having been established a decade earlier, they didn't significantly outpace Boeing in the Chinese market until 2019. And the Chinese press is making it no secret that the US-China trade war had something to do with the latter event. Also, China is apparently aiming to have their C919 grab 10% of the local market by 2025.)
[Tata] India did strike a deal with Airbus in late 2022 to locally manufacture the smaller and military-oriented C295, and only about 50 pieces or so, but that jet also has some civilian certifications, as I understand, so an Indian company will probably gain useful experience. At least, the deal was touted by the Indian side as a "unique opportunity for the Indian private sector to enter into technology intensive and highly competitive aviation industry". If that (BBC) story is not mistaken, it's also going to be the largest aircraft manufactured in India, to date. (For comparison, the C295 is about 25 meters long, the A320 about 37 meters.) In the past, India's HAL built some 89 HS 748 under license; most were for military use, but some went into civilian service. These aircraft are approximately 20 meters long.
Embraer, which is the 3rd manufacturer worldwide, is based in Brazil. Their trajectory in terms of products is fairly informative as well, i.e. took them decades to graduate to their E-series narrow body airliners. Neither Russia nor Japan have fared too well in the past couple of decades. The new Sukhoi airliners have only become really attractive after the sudden decoupling from the West due to the war, or at least after 2014 if you want to be more charitable. Japan did even worse, as I understand, as they seem to have essentially shut down theirs (despite their Canadian purchase--well, that deal was complicated, the CRJ line/designs was sold to Mitsubishi, which seems to have done nothing with it, but the Canadian factory to Airbus, which now makes A220s there. Mitsubishi's own SpaceJet line was also cancelled.) Somewhat similarly to India, Japan managed to build a 26 meter indigenous turboprop but this also saw mostly military service, and is being retired.
The state-owned Hindustan Aeronautics Limited is apparently working on a new regional airliner though, of indigenous design, although in keeping with HAL's engine expertise to date (they make licensed Honeywell TPE331), it appears it's going to be a turboprop, at least initially, albeit a slightly larger one (28.6 meters long) than the C295. Planned first flight seems to be for 2025-26. Suspiciously absent are any [announced] commitments to buy it though, even in the most recent news I found about it.
When Modi discussed/announced that C295 deal, he was also quoted saying
I also see the days coming when larger passenger planes for the world will also be made in India.
So I guess we can tentatively conclude that the timing of the larger order precluded more Indian manufacturing deals beforehand (if they were even possible). Also, as I understand several Indian airlines are struggling economically, so keeping them afloat and jumpstarting large-scale domestic production at the same would require substantial budgetary commitments. Sometimes economic realities trump political desiderata. This perhaps bears some similarity to what happened to when the Berlusconi-salvaged Italian airlines announced plans to buy Sukhoi airliners (around 2010), but eventually these were swapped for Embraers, because the former were taking too long to materialize. (Modi seems to have avoided that kind of pie-in-the-face by not making more definitive statements than the one I quoted above.)
