@Stephen Cohen
A few reason I can think of.
Building a cryogenic engine is considered THE MOST difficult thing to do in an aerospace industry. India has now joined elite club of 2-3 countries that have been able to do it independently.
1) Why has India then been unable to produce a simple gas turbine engine (A jet engine in a layman's terms)? Because there has simply been no need. Despite of India's Non-alignment policy, it has traditionally been part of Soviet Union''s influence and after the cold-war of US's to somewhat extent. You know what they say 'Necessity is mother of ALL inventions' India simply didn't have to. They were always spoilt for choices. If you notice the biggest breakthroughs came about at the time of sanctions (LCA and progress on Kaveri).
India has in the past gone down the route of 'Why would you want to reinvent the wheel and fail in doing that 100 times and embarrass yourself before succeeding once.' That attitude has changed ever since the 21st century, which is a good thing.
2) Lack of incentive for private sector. Even since East India company India has been overly cautious and socialist when it comes to private sector. Until recently, Government agencies had the monopoly and were expected to do everything without any real incentives. HAL this and DRDO that and so on.
If anyone knows how to compete, it's all these multi-national giants when it comes to making money. They will do the research, train people and produce themselves if they can make a buck out of it. Look everywhere else, Boeing, LM, BAE, MBDA, Airbus, GE, EADS, Rolls-Royce they're all multi-national giants that make the bulk of aerospace and defence industry.
3) Lack of infrastructure and skilled labour. Take UK for example, I graduated 2 years ago with a degree in Aeronautical Engineering and roughly 10,000 other people that same year. So, every year a tiny country with population of 60 million produces 10,000 Aeronautical Engineers whereas, India probably produces half that number with the population of 1.2 billion. India has always either had
Creme De La Creme that is your ISRO scientists or cheap labour. But now even on intermediate level (that is your everyday engineers) India is third largest producer of STEM (Science, Technology, Engineering and Mathematics) graduates.
New universities are opening left, right and centre and it will take some time but, government is investing heavily in new universities and it will take a few decades to catch up but, we'll get there.
http://www.scimagojr.com/countryrank.php?year=2016&category=2202
Now in 2016, India is 5th biggest publisher of scientific papers in Aerospace Engineering. In 1996, when these rankings started we were 11th and did less research than tiny Netherlands. In 20 years, we'll be in top 2. Also, research and its' applications take time. Faraday did research on electromagnetic induction around in mid-19th century and today, we're applying it in the biggest and cutting-edge military application. E.g. EMALS for aircraft carriers.
So, be patient India's only trajectory is upwards. For people like us sitting on a forum we don't have the patience to wait 15-20 years to see the change but, these things takes time.