A new study claims the Indian entertainment business loses $4 billion a year to piracy.

The Indian music industry alone lost $325 million to piracy last year, according to the report, titled "The Effects of Counterfeiting and Piracy on India's Entertainment Industry," which was released March 27 by the U.S.-India Business Council (USIBC) in association with the Federation of Indian Chambers of Commerce and Industry (FICCI).

That piracy figure compares to estimated legitimate music sales of $183 million in 2007.

The study was prepared by Mumbai-based consultants Ernst and Young India and was funded by the Global Intellectual Property Center of the U.S. Chamber of Commerce.

"Piracy affects the industries of both countries, and now that we have seen the situation in India, we will have a reciprocal study to gauge the impact of piracy on Indian entertainment in the U.S.," said USIBC president Ron Somers in an interview.

Commented FICCI secretary-general Amit Mitra: "For the average Indian who wants to increase his or her chances for being employed in Bollywood and associated industries, fighting piracy is a place where all our collective efforts must start."

Somers says the U.S. strongly supports optical-disc legislation that has been proposed by the Indian government.

"This legislation implies that just like currency notes, every disc will have a unique identification number so that if it is pirated, its origins can be traced," Somers adds.