This is actually something I can answer somewhat as it relate to Hinduism.

Its been argued that it has a connection to early Vedic religion(1700ish - 500ish BCE) to which had a very strong emphasis on oral recitation and which has been passed down too early Hinduism, and somewhat today's Hinduism that also has a large focus on oral recitation and tradition.

You can also argue that it has a connection too that it has been looked down on writing as dirty a profession(think inc stains etc) and that It wasn't before much later into more modern Hinduism that writing really took its place in Hinduism.

Among Hinduism greatest works are the Rigveda that is thought to been composed around 1500-1200 BCE and wasn't written down before 300 CE, which is quite along time.

Paraphrasing my professor inn Hinduism that explained somewhat why they valued oral recitation compared to writing "A book might be lost, but you'll never loose your memory".

Source:

Knut A. Jacobsen Hinduismen 2010

I hope this helps.

I'm reading a book called The History of the Ancient World by Susan Wise Bauer, and literally fell asleep last night reading the chapter which discussed this.

The time period being discussed is "Sometime before 2300 B.C" and the region being a series of developed cities along the Indus river referred to as the Harappan cities, after the first (and largest) of them to be discovered.

"What remains of the Indus city-civilization, generally called the "Harappan civilization" after the city of Harappa, consists of city ruins, a whole assortment of seals used to identify goods for trading, and brief inscriptions that no one can read, since the script has never been deciphered."

This point lends itself to /u/Gilwath's response, as it appears they they had in fact developed a form of writing, but that it was sparsely used for cultural reasons which are unclear...since there is so little remaining of the culture to explain this to us. They had an elaborate token system for trade, evidence of which has been found as far away as Sumer, but very little of their history remains behind.

Bauer phrases it thus: "With an effort of imagination we can people [the cities] with faceless artisans, merchants, and laborers, but the Harappan civilization has no recorded battles, sieges, power struggles, or tales of heroes."

There are clues that lead us to believe there were kings or other authority figures, as there have been statues found of bearded men with ornate clothing and headgear...but that does not specifically guarantee that it was a king. The cities have what appear to be barracks or servants' quarters, suggesting some level of hierarchy and organization required to maintain the society. However we have no clay tablets, no papyrus, no examples of record-keeping at all even though the civilization had a writing system which could have produced such.

There are as well very few signs of warfare, and many of the cities appear to be meticulously planned, boasting of grid-formation streets, a citadel (always to the west) and a separate group of houses and markets. Streets were wide, had brick gutters, and houses had designated bathrooms.

So I guess the main point is that as far as we know, the Indian people were perfectly capable of documenting their history, were well advanced in their technologies for the time, but for some cultural reason (which has obviously not been recorded) they decided not to. Any more than that is incredibly difficult to infer with so very little to go upon.

To be honest how poorly documented history is really depends on what you're trying to do. In order to say that other places have histories that are well documented, you have to be interested in exactly what the documents are about - in general high level political and economic changes, lives of emperors, some ethnology, etc. Not much exists from those times about regular people's lives, or hard data that's invaluable to more recent historical studies.

India's history is poorly documented for some of the reasons Gilwath states, but also because political power was seen as much less worthwhile of documenting. Most Hindu texts are expressly concerned with religion, and Sanskrit functioned mainly as a religious written language. There are many of these documents - they just aren't historical.

If you are interested in India during antiquity Robert Kaplan wrote a fantastic book called Monsoon: The Indian Ocean and The Future of American Sea Power. There is a cool emphasis on how the Indian Ocean helped spread culture all along the coast. Due to the monsoons of the Indian Ocean people could travel before steam powered ships.