In the mid '80s and '90s, when everything was neon and the Internet still hadn't reached our Intel 386s, songs like 'Last Christmas' and 'Macarena' were blasting from boom boxes all over the Western world, making it to the top of the charts in many countries. Funnily enough, the same tunes reached the top of the charts in India as well - thanks to Anu Malik, the poster boy for plagarism.
Anu Malik is a currently a judge on Indian Idol and easily one of Bollywood's most successful music composers, though some might say that his skill set consisted of access to mixtapes of International chartbusters. He took advantage of the fact that most Indian people at that time had never heard much music from outside the country, and released local versions of many western pop hits, passing them off as his own. He turned Los Del Rio's "Macarena" into his very own LeLeLena, stole the country song "Cotton Eyed Joe" to make Koi Nahi Tere Jaisa, and "wrote" Dil Mera after listening to a tape of "Last Christmas", amongst many more. He even took a shot at copying Beethoven's Für Elise - an elevator favorite all around the world. All of these songs featured in blockbuster Bollywood movies, complete with background dancers and frizzy haired actresses, and often sold over a million tapes.
Eventually, the growing popularity of MTV, the Internet, and mp3s that didn't take an hour to download meant that Bollywood was forced to straighten its act and get to work. And that has probably hurt the industry far more than piracy and filesharing.