What about the idea that if Sharp drew on India etc ( assuming he knew or could have found out) this might undermine his claim to be discovering a specifically English 'folk music' or when it came to the folk based art music which was his eventual aim that this was 'national music'.

This isn't about melodic material, it's about theory, and the way melodies are constructed when you have a theory in mind; you put them together like making a model with Lego, selecting a different set of pieces and colours to start with on each performance or composition. This is universal in kinds of music that are primarily improvised (like the Persian "radif"), but it was done explicitly in the psalm settings of the mediaeval Church and you can hear it (in a more fragmentary and implicit form) in Western folk music too. The Dorian final cadence (tonic-supertonic-tonic-subtonic-tonic) occurs right across Asia: the final cadence in a major-mode hornpipe (tonic-third-tonic) is more distinctively British.

Sharp's project of using folk material to build a national art music sent him off track here. He wanted to harmonize his tunes in an idiomatic way, and to do that he threw away the melodic content of the modes and reduced them to static scale structures ("octave species" in modern parlance). Anybody with a practical knowledge of a living, consciously modal idiom (like an Orthodox choirmaster or an Arabic nightclub singer) could have told him that was a road to nowhere. (Harker doesn't pick Sharp up for this, as far as I know).