James, 44, represented Kerala Blasters as their coach-cum-player in the inaugural edition of the franchise-based league.
"They have got to do some heavy investment, the infrastructure is near on non-existent," the former Liverpool player said.
He added: "Four, maybe five sides, were playing on cricket pitches. The coaching is another issue."
James also questioned the impact of some of the marquee players who were part of the league.
Former Juventus striker Alessandro Del Piero, 40, ex-Arsenal midfielder Freddie Ljungberg, 37, and former France forward David Trezeguet, 37, have all featured in the competition.
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About the league that started in October, James, who won 53 caps for England, further said: "Training facilities are very, very hard to come by. There is a severe lack of qualified coaches in India."
He though also had some positive words to say about the league.
"If they get those things right, the potential is massive."
He said: "As far as wanting more of it, yes, for sure. I always fancied the chance of doing a manager's job and I'm enjoying this one.