I will agree with your comments/observations. India went on producing third grade Ambassador / Fiat and standard herald cars for decades.
Socialistic goals never allowed India to develop its Industry.
It is now that we are going into private sector and trying to bring in latest technology.
It will take time to catch up. If arjun singh / vp singh / buta singh / MM singh succeed in clamping down India's nascent private sector, than this will keep on happenning.