Cost was a smaller factor than politics; the Indian government wanted the private keys for our certs in order to let FB put a POP there. That was an absolute dealbreaker, so we served India from Singapore and other POPs in nearby countries.

Regarding building a datacenter, that's much higher risk since it's a $100M-1B capital investment. I'm guessing both Facebook and Google see too much volatility to make the risk worth it. It could be an expensive paperweight if the Indian government changed their minds.

My intuition tells me it's a combination of:

* They eventually will build one, but Indian consumers are (as of right now) less valuable to them (from an ad targeting perspective) than other geographies e.g. the economic/time/effort investment ROI is better elsewhere in the short term

* SE Asia (and their POPs there) have reasonable connectivity to India, so it might good enough for the time being

Google has announced a region for Mumbai (India) coming this year: https://cloud.google.com/about/locations/

(Can't/won't speculate as to why not earlier.)