It was just a couple of months back that a few of my best friend's pen friends who are American visited India on a tour. They stopped for 3 days in Delhi, the city where I stay and since we didn't have a lot of stuff to talk about, we tried to talk about the usual topics - our extremely different culture, food, college life, crushes and more until the topic drifted to movies. They were really proud of Hollywood and their films - the direction, acting, VFX, scripts. I couldn't agree more - Hollywood has set very high standards that every film industry tries to follow the world over. 
                      However, they were really skeptical about Bollywood movies - their running time, song and dance sequences, lack of bold scenes, unrealistic plots and more. 
No, no, no - I am not trying to defend my country or its films from getting mocked on the world stage, but I would really like to clarify some Myths that are prevalent about Indian Cinema in the West. Here, take a look :

1. Indian Cinema means Bollywood : It's really a pity that most people don't about 20 film industries apart from Bollywood which is the Hindi language film industry. India produces films in Malayalam, Tamil, Kannada, Telugu, Bengali, Punjabi, Gujarati, Marathi, Bhojpuri, Haryanvi, Bhojpuri, Oriya, Rajasthani, Manipuri and Kashmiri are the main languages in which the movies are produced. 

And no, these industries are nowhere short of Bollywood in all departments - and some of them, I feel, like the Malayalam, Tamil & Bengali industries have a rich history of giving classics. Even though I am very well versed with Hindi and Bollywood, I feel these industries produce quality cinema, both in better quality and greater quantity in comparison to Bollywood films. However, their major drawback is the lack of a pan India recognition. Hindi is the national language and hence has a larger following in most of the states - states like Delhi, Bihar, Uttar Pradesh, Maharashta, Rajasthan, Punjab, Haryana, Madhya Pradesh, Chattisgarh etc. where Hindi is understood by majority of the population. However, that's not the case with, say the Malayalam film industry which has a language base only in the state of Kerala. Therefore, their budgets and scope are also limited to a great extent.

Dabangg : A brilliant entertainer : Perfect example of a Masala movie

These industries mostly produce cinema with simple scripts & limited budget but nowhere short of thrill and entertainment. You'll never see a Superhero flick in these languages. Even Bollywood is catching up very slowly with Hollywood standard visual effects from movies like starring Shah Rukh Khan and Krrish series starring Hrithik Roshan. 

Also, the trend of Masala entertainers was started in the South Indian languages only. Masala films are popcorn flicks - larger than life movies where the basic plot remains the same : One guy fighting several bad guys at once, falls for a girl, defeats the villain and lives happily ever after with the heroine. These are family movies and are released on festival holidays. Of course, there are some variations but these are crowd pleaser, with the fans having a jolly good time witnessing their favorite star fighting the goons. You'll see some physics defying stunts, some comedy, action, drama, emotions and romance packed together to give you entertainment, the only reason these movies are made at the first place.

Udaan : This deserved an Oscar!

2. There are songs and dance sequences in every movie : That's true to a great extent but I would like to highlight that this is something that's the USP of Indian Cinema. I know not all of you will agree with me on this because I don't see many Westerners loving the Bollywood dance sequences and find them to be unnecessary and repetitive. I do agree with many and yes, there are a lot of cases where these are unnecessarily stuffed up, just as in the case of the aforementioned Masala entertainers. Now people don't see these films to witness the excellence of cinema or to be in awe of a realistic script. They are just means of busting stress and monotony in their busy lives.
                             Now coming back to the point, we do not have a lot of music albums releasing like the west - Most of the Hindi language songs are from Bollywood movies and the same is the case with regional languages. There's a fixed sequence of around 4-5 five-minute songs in a lot of movies. And yes, Indian movies have a runtime somewhere around 3 hours that may seem too much.
                                      The dance sequences are also fairly colorful and I'd like to showcase the importance of these elements : Firstly, the songs are released a couple of weeks before the movie releases. So they serve as excellent marketing tools if they become popular and there'll be mouth-to-mouth publicity. Secondly, I believe the songs serve as much greater instruments to mirror the emotions felt by the characters in the plot: whether that's love, pain, introspection or joy. Now justifying the dance, some of the dance sequences are when the character dreams of the heroine falling for him and both of them coming together. Otherwise, these occur to depict celebration : in case of a wedding, festival, birthday etc. There are also some cases where the dances & songs are not part of the original movie but are just shot for marketing & promotion.
Now if you are looking for exceptions, Udaan, Like Stars on Earth, Wake Up Sid, Rocket Singh Salesman of the Year, A Wednesday, Kahaani etc. have all managed to earn acclaim - from critics & audiences alike in spite of any crowd pleasing dances.

Also, Bollywood movies like 3 Idiots, Lagaan & Rang De Basanti have all managed to rank among the Top 250 movies of all time on IMDB in spite of dances in them. So I don't think presence of music & dance is enough to judge the finesse of any film.

I haven't talked in detail about regional cinema since I am not aware of films in all languages. I am only knowledgeable of the Malayalam film industry apart from Bollywood since I understand the language. But the same applies to Indian Cinema of all languages.

3. The Female Lead is Always an eye Candy : Yes, I do agree that the women portrayed in the movies are as a visual appeal to the audience in most cases and not for their acting skills.
Even if you'll find average looking men portrayed as the protagonists in some regional language cinema, that's never the case with women.
                                       However, I believe that this is the case in many other countries as well with the patriarchal society we live in and the male dominated plots with the women getting sidelined. 

Sridevi pulls off a stunner making a comeback : English Vinglish is a gem..

But slowly and surely, this trend is changing for the good. It has never always been the case with Bollywood starlets like Madhuri Dixit, Kajol, Rekha, Hema Malini, Helen, Sridevi, Rani Mukherjee, Karisma Kapoor, Aishwarya Rai Bachchan, Kareena Kapoor etc. and off late, actresses like Vidya Balan,Priyanka Chopra, Parineeti Chopra, Deepika Padukone etc. have managed to lift the success of an entire movie on their shoulders alone. 

I won't talk about the regional films since I am not knowledgeable about all of them, but surely it's a very positive trend with a lot of talented actresses proving their acting talent.      

The performances of Rani Mukherjee in Black, Vidya Balan in Kahaani, Madhuri Dixit in Devdas, Kajol in Fanaa & My Name is Khan, Sridevi in English Vinglish have all garnered equal praise from foreign critics alike.

4.Indian movies are unrealistic & larger than life : I know this is mostly talked about the Masala entertainers and that's true - they are unrealistic just because they're not meant to be driven by any logic. They'll lack great sense and the only purpose of the makers is to offer full entertainment to the audience so that they feel their money's worth.

However, I don't understand what's really meant by realistic cinema. It's ironical that the people who criticise these movies enjoy watching Dark Knight, X-Men, Avengers, Thor, Lord of the Rings, Harry Potter series, Twilight and other superhero flicks. Yes, they have a sense of fantasy & imagination filled in them which considerably lacks in Indian cinema but these films are made for the masses. They won't always understand a complicated movie like Inception or find 127 hours. 

And let's be realistic about 'larger than life' cinema : The movies give a mean of escape for the audience. And if the people are able to shift their focus from the anxieties in their life to the dream world of a movie for 3 hours and maybe more, what's the harm?

3 Idiots : A bit over the top but one of the best motivational & 'feel good' movie of all time

3 Idiots is one example which's arguably the greatest Bollywood film of all time and enjoys a rating of 8.5 on IMDB  : realistic but larger than life at the same time. But a movie with its heart at the right place exposing the faulty Asian education system which's managed to create a great following especially in countries like China, Japan, Korea, Bangladesh, Vietnam, Malaysia, Philippines, Myanmar and many other Western audiences.

1 Nenokkadine : A regional movie that may not get what it deserves
'1' is a 2014 Telugu Psychological Thriller that has managed to earn a 9.2 IMDB rating after 17K+ votes. So, both the taste of the audience & innovative experiments are improving gradually.

5. Indian Cinema lacks Bold scenes : Yes, once again I agree with this but I want to explain the reason behind this : first, in general the movies appeal to the family audiences and if the censor board certifies a 'Adult only' rating to the movie, the makers will certainly lose out on a lot of audience.
                                         Also, there's a lack of sex scenes and kissing scenes in the movie's because the censor board in India is very strict : They'd even cut out important scenes in the movie to keep up with the old traditional mindset. And even if these scenes are approved by the 'Censor Board of Film Certification', if the movies promote an excess of vulgarity, it invites violent protests from the sensitive groups of the Indian society. However, these days a lot of movies have intimate scenes in them with the makers also taking a risk & audience slowly understanding the importance of a scene in accordance with the story.  However, yet again the trend is progressive : These days, a lot of movies have intimate scenes in them although very mild as compared to Hollywood standards. Bengali cinema has had a lot of kissing scenes in them.

When it comes to violent scenes in movies, Gangs of Wasseypur is a critically acclaimed crime drama inspired from true happenings in the mining town of Wasseypur which's directed by Anurag Kashyap : Indian answer to Tarantino. OMG! Oh My God is also tale of a man who sues God and is one of the boldest and most courageous films to be ever made, leaving the viewers to think deep about the concept of 'religion'.

Indian cinema is surely progressing and even though a lot of movies are trash, still some movies are well in par with international standards.