Quite a few reasons:
1. No money to pursue the program. Our first priority is to stop the squadrons draw down. With our current orders, we will have a smaller air force than PAF by 2025. So money has been diverted to stop this from happening. Hence orders for LCA, Rafale, MMRCA etc.
2. The original plan was to bring next gen technology into India. So the IAF wanted a joint venture instead of just license production. They were looking ahead. But it turned out most of the program will be run by the Russians, leaving only 25% of the program to India. And DRDO said they do not need Russian help for next gen tech, they can do it themselves. Since the R&D part of the program is no longer necessary, we save a lot of money and the 5 years needed to develop the FGFA.
Now we have other choices. We can join the FGFA program later, after Russia's done developing most of it, buy 3 squadrons of PAK FA outright from Russia, or sign up for license production of an Indianised version. Or we can abandon the entire program as we deem fit since we already have our own program running in parallel called AMCA.
When the program started, 2007, we didn't have that kind of technology. But now we are already developing this stuff in India.
Personally, if we do go for the FGFA, I want India to enter a development program for a Mark 2 version with 6th gen avionics after 2025. By then our industry would have matured enough to contribute to the program.
3. It's dumb to places bulk orders before the Russians do.
The delays haven't helped either.
The program hasn't been abandoned though. The next administration will decide the future course of action.