I think in India people use windows because its taken for granted as free. Assemblers bundle illegal copy of windows to lower the total pc cost. This is why 'linux is free' doesn't appeal to many since Windows is free for them as well .

I'm sure Microsoft is aware of the rampant piracy in India but has not cracked down on illegal setups as of now. They however do seize countefeit copies.

There are three things which can happen if Microsoft cracksdown on Windows piracy.

1. People will go buy the original ones..
2. Opt for Linux as an alternative..
3. Move on to MAC.

Since there is Adobe and microsoft office for the mac it makes the best alternative to a Windows based pc. For gaming they may move on to consoles...