Then why is China the second largest movie revenue country after US and not India? Hollywood studio all rushed to collaborate with Chinese firm , making movies suitable for Chinese market while not much interest of Hollywood abt Bollywood?It doesn't matter much from the revenue perspective but Jackie chan has a good following in India and It was expected to do good in India.
To answer your second question. Most of the Indians go to movies and a good lot of people go there quite frequently. Average movie ticket cost 4-5 $
even if you have big pockets doesn't mean you don't need new markets
the more the merrier
People goes where the money goes, I guess that answers your point.