In short, ISRO was involved in talks to join the ISS program, in the period 2010 through 2014. By the end of which, India chose not to proceed.
You can see an interview here when they were still positive about joining the ISS program:
ISRO Chairman Dr K Radhakrishnan confirmed that India would initially be contributing instruments but, as of now, there were no plans to send Indians to the space station. India will be the sixth nation to join this 100 billion dollar effort.
Indian Space Research Organisation (Isro) has said it has taken steps to join the International Space Station (ISS)
K Radhakrishan, Chairman, Isro, said: "India is not a partner for now, in International Space Station. We are in discussion whether we could do something on climate related earth observation system experiments. Initial discussions are on."
He added, ISS has invited other countries, including India, to conduct experiments and we are interested in climate related areas.
South Korea, India to begin ISS partnership talks in 2010
The heads of the South Korean and Indian space agencies told the first plenary session of the International Astronautical Congress in Daejeon, South Korea on 12 October that they want to join the ISS.
Indian Space Research Organisation chairman G Madhavan Nair told the plenary "we want to join." His country could help with crew transport as ISRO is planning a manned space programme with a first flight around 2015.
However, by 2019 it was made clear that the ISRO will not join the ISS at all:
Instead, ISRO's own space station is seen as a natural follow on progression from the current Gaganyaan mission:
Isro chairman K Sivan, ... said the high-profile project of setting up India's own space station will be an extension or next phase of the Gaganyaan mission (sending three Indian astronauts to space for seven days in LEO).
As for other reasons why ISRO did not participate in the ISS, you have to look back in history, before the ISS even existed:
India had a number of technology embargoes placed upon it restricting space-related technology that arose from its nuclear weapon testing in the 1970s that lasted all the way through to 2006. (The forming of the Nuclear Suppliers Group as a multilateral export control regime was a direct result of the Indian nuclear bomb test, and opposition to India was still present in 2008).
ISRO's facilities at Vikram Sarabhai Space Centre (VSSC) in Kerala, the Satish Dhawan Space Centre (SDSC) in Andhra Pradesh and the Liquid Propulsion Centre in Tamil Nadu - were still under the technology embargo list by mid 2000s.
The ISS has its roots as far back as 1985 in the US plans for a US space station (Freedom) and in the planned follow up to the Soviet Mir space station. Both of these failed due to budgetary reasons but Space Station Freedom had already partnerships established that went all the way through to the planning and construction of the ISS in the mid-1990s:
Major contributing agency ESA was already a partner in 1984, Japan by 1985, Canada 1986. By 1998, the 15 partners had already been established through the Space Station Intergovernmental Agreement.
Through historical involvement, the amount of money already poured into the ISS program by all the agencies involved, far outweighed what the ISRO could have contributed, even conceptually, before construction on the ISS had begun.
Even after 1993 and the ISS being formally announced, other events and factors would weigh against ISRO being invited to participate:
India-US space cooperation suffered a setback in 1998 after the Pokhran nuclear tests, leading to the imposition of sanctions by the Bill Clinton administration.
The US took a dim view of ISRO when India tried to procure cryogenic engines from Russia in the early 1990s.
ISRO was not invited (partly due to these factors), nor did it request to join the ISS program in the mid 1990s since its own indigenously developed space program was seen as a higher priority. Essentially ISRO at the planning and finalizing stage of the ISS was not in a position to contribute substantially.
The ISRO human spaceflight program (and therefore Gaganyaan) was only approved in 2007. With no training facilities available, future crew training is being carried out in Russia.
ISRO had not been able to fund an Indian astronaut, even on Soyuz, since Rakesh Sharma in 1984.
The ISS has only 6 seats available, shared between the US, Russians and ESA partners. Seats would have to be bought and these are not cheap.
the cost of developing hardware to contribute to the ISS is extremely high. As an example, Brazil officially became a partner in 1997 (https://www.nasa.gov/centers/johnson/news/releases/1996_1998/h97-233.html) - by 2007 they were out of it as they could not afford the cost of their contribution.
ISRO's budget is very small compared to the existing contributing partners and has no preferential leverage that current partners do (hardware/supply/seat swaps). In 2002 the ISRO budget was something like US$275m. (https://i.redd.it/w0eg4s1hqve61.png)
By the time ISRO got round to having talks to join the ISS, it was at a time when the ISS end of life was perceived to be around 2016 and talks had begun about life extension of the station. It is at this point that other nations not originally involved, such as South Korea and India, expressed interest.
With the high cost of seats to and on the station the high cost of developing and contributing the hardware to the station, and the expected life expectancy thought to be on the near horizon, ISRO joining the ISS looked less attractive as time and talks went on.
ISRO chances to even have a seat to the ISS are very slim, given that without substantial budgetary injection their placing is very low in the ISS partners priority list.
To redirect enough budget to become a partner on the ISS program would likely have a budgetary negative impact on its indigenous manned flight program and associated development.
By comparison, and Indian space station following on from the anticipated-to-be successful Gaganyaan program, would be seen as a greater triumph born from home-grown development to the Indian population, for a much smaller budget than it would have otherwise been forced to spend in keeping up with its potential ISS partners.
The development of a home-grown space station is seen as a logical successor to the Gaganyaan mission and therefore would help keep the human-spaceflight program rolling for the Indian government.
Having said all that, ISRO has contributed to the ISS indirectly, through instrumentation and experiment programs with various ISS partners.
1991 the Indian Space Research Organisation (ISRO) inked an agreement with the Russian space agency Glavkosmos for the transfer of cryogenic technology. Following the collapse of its Soviet empire, Russia was under considerable American influence. In this backdrop, both Glavkosmos and ISRO anticipated the United States would try and stymie the deal.
So Glavkosmos and ISRO drew up Plan B – outsource the manufacture of the cryogenic engines to Kerala Hi-tech Industries Limited (KELTEC). The arrangement was designed to get around the provisions of the Missile Technology Control Regime (MTCR) – a Western cabal that aims to deny ballistic missile technology to non-Western countries, especially India.
In 2018 it was announced that an Indian astronaut was to be considered for a seat on a Soyuz to the ISS in 2022, however funding was not forthcoming and this was cancelled.