The 1980s saw the rise of India's greatest superstar, Amitabh Bachchan (Sholay/Embers 1975), whose roles as the "angry young man" or "industrial hero" (Kishore Valicha), touched a particular nerve during this troubled era. It also saw the swansong of the Muslim social and the historical film, in one of the most exquisite and popular films: Pakeezah/The Pure One, 1971, which has become a cult classic. It was during this decade that state sponsorship allowed Indian "art" or "parallel" cinema to flower briefly, with films ranging from the avant-garde cinema of Mani Kaul to a realistic style best made by Shyam Benegal, featuring some of India's most admired actors, Shabana Azmi, Smita Patil, Om Puri and Naseerudin Shah.

Old Bollywood and New Wave cinema share an uneasy co-existence. 1973 discovers teen romance in Bobby. Bachchan delivers first big hit, Zanjeer. There is art and angst too: Shyam Benegal’s Ankur and MS Sathyu’s Garam Hawa. But Manmohan Desai rules with Amar, Akbar, Anthony and Dharam Veer

The seventies has further-widened the gap between multistar big budgeted off beat films. The popular Hindi hits of the decade include Kamal Amrohis Pakeeza, Rajkapoor's Bobby , Devar's Haathi Mere Saathi, Ramesh Sippy's Sholay, Zanjeer, Deewar, Khoon Pasina, Yaadon Ki Baarat, Kabhi Kabhi, Dharamveer, Amar Akbar Anthony, Hum Kisise Kum Nahin, and Muqaddar ka Sikandar. Of these majority of the films were action oriented with revenge as the dominating theme.

Down in the South, the new wave cinema originated in Karnataka and Kerala. Pattabhi Rama Reddy's Damskara (70) and Adoor Gopalakrishnan's Swayamvaram (72) were the trend setters in Kannada and Malayalam respectively. This continued with a series of socially conspicuous films like M.T. Vasidevan Nair's Nirmalyam, B.V.Karanth's Chomana Dudi, Girish Karnad's Kaadu, Girish Kasara Valli's Ghatasradha, G. Aravindan's Uttarayanam and Thamp, K. Balachander's Arangetram, Avargal and Apoorva Ragangal, Adoor's Kodyettam, K.G. George's Swapnadanam and P.A. Backer's Chuvanna Vithukal and G.V.Iyer's Hamsageethe.

The Hindi avante garde or new wave seems to have reached its bloom period towards the end of the seventies with the coming of film makers like Govind Nihalani (Aakrosh), Saeed Mirza (Albert Pinto Ko Gussa Kyon Aata Hai, Aravind Desai ki Ajeeb Daastan), Rabindra Dharmaraj (Chakra), Sai Paranjpe (Sparsh), Muzafar Ali (Gaman) and Biplab Roy Chowdhari (Shodh). The movement spread to the other regional cinemas such as Marathi, Gujarathi, Assamese, Oriya and Telugu. Directors like Jabbar Patel (Samna, Simhasan), Ramdas Phuttane (Sarvasakshi), Ketan Mehta (Bhavni Bhavai). Babendranath Saikia(Sandhya Rag), Jahanu Barua (Aparoopa, Papori), Manmohan Mohapatra (Klanta Aparanha, Majhi Pahacha), Nirad Mohapatra (Maya Miriga) and Gautam Ghose (Ma Bhoomi) came to the scene with their films.