Actually, MS knew all along that piracy is rampant and they let it work for them quite well. With everyone familiarizing themselves with nothing other than MS products, MS knew for a fact that money would eventually come, in sacks that too. It wasn't a loss in the long term.
Markets like China and India are different wherein enforcement is not that easy. Heck, proper enforcement would even make people opt for a hassle free and priceless option like *nix. So MS chose not to bother too much about piracy in domestic installations and thus sorta sent a message like "go on, use it, we don't care" and fueled piracy to an extent, if I may say.
For an average consumer in India, computers are synonymous with Windows products. It's not a choice for them at all, they do not have a choice!
Even the local coke/hash peddler would give out stuff for free to get one hooked. ;)