A surprisingly good question

Because it expands to "why does anyone trust any CA?" And most of the time people don't; it's the app making the choice for the user.

The answer for eMudhra specifically, I'd assume, is that it was simply a regional publicly-traded corp that paid the fees and went through the process and had clients worth having; just like any other CA

Most likely because they didn't assume a certificate signing company could be that bad at their job.