It is pretty unlikely that KTM would do that and if they did, it's pretty unlikely that relocating the assembly plant on its own would solve any issues that they might be having.
The investment in tooling and equipment at a given location to build a vehicle is pretty substantial. The vehicle is put together from parts coming from suppliers; there's more to it than just a bunch of blokes in a warehouse bolting things together. If they have their processes right, it won't matter where the assembly plant is. If there is a process issue, it's better to just fix it. If there is a supplier issue, again, it's better to just fix it. If there is a major underlying design and engineering flaw, relocating the assembly plant isn't going to make it go away, and relocating to China from India hardly seems like a step up in the world.
Now, if they are talking about the next generation of that vehicle, that's a whole different ball game. If the next gen is a full redesign, requiring all new tooling anyway, it doesn't matter where in the world you put it. But the 125/250/390 RC/Duke vehicle platform has been around for such a short time that something of that sort, especially for a smaller manufacturer, is unlikely for another few years. It would be better to just fix the issues and move on.