I am talking in terms of style and format. I am not saying musicals don't sell; witness Disney animations which are mostly musicals. But if you want to sell Bollywood films to non-South Asian audiences, then Bollywood fims must adopt Hollywood style presentation.
Indian Film Industry has many segments - Malayalam Movies, Tamil Movies, Kannada Movies, Telegu Movies, Punjabi Movies, Bengali Movies, Bhojpuri Movies, Marathi Movies, Gujarati Movies, Oriya Movies, Hindi Movies.
Of this only Hindi Movies are made for a Pan India audience.
Of this only a limited number of Hindi Movies are ever exported and are viewed by audiences in Pakistan, Middle East, South korea etc.
The real reason is Indian Movies do not have a Global distribution channel. This distribution channel then becomes a route for Audience Feedback and movies slowly evolve to Global taste.
Current distribution channel is limited to Middle east and countries with significant Indian presence. Feedback from there has gone into improving the Hindi Movie content.
Its only recently Hindi Film Industry has consolidated to become Large Production House based centers. They have tied up with Hollywood distribution network and will be distributing movies globally. When the feedback network grows stronger, the Industry will adapt to cater to Global audience. This is an evolutionary process and should take around 10-20 years.
Ghandi is a good example of an India-themed movie that is well-received by non-Indian audiences.
Gandhi was a Hollywood production. But because it was about 'Gandhi' most of the professional Indian actors who acted in it worked for free. The Huge masses you see in the movie also worked for free. Gandhi can never be remade today due to Budgetary reasons.