• Back to your old haunt. Happy to be back in the Jama Masjid area? I believe this is where you did your first documentary.That’s right.• In 1978?Twenty-five years ago now.• When you and I were really young, idealistic and gullible.I am still idealistic.• Not so gullible.

Oh no, I was never gullible.

• And young still?

Inshallah.

• You’d better say so, you are six weeks younger than I.

Well, youth is a state of mind.

• Absolutely. So tell me, take me back a little bit to 1978, what was it like, what brought you here?

Well, I was a student at Miranda House. I went on a scholarship to Harvard, where I stumbled into documentary film-making. I came here, back to Jama Masjid to do my first thesis film which I shot myself. The idea was to make a portrait of this great street and this great masjid... it was the encounters that I had on the street, the people... you know, from a chicken auction to mechanics to people asking me about desire and marriage. And I shot it myself. It is the street that I love and my inspiration really comes from this street.

• In so many ways this has been a continuing metaphor in your work. Because it figures even in Monsoon Wedding, where you had Mr Dubey come and hide somewhere here.

He lives here. Vijay Raaz was the Dubey character, and I made his home here. I very much wanted to show the upstairs-downstairs aspect of Indian life — life is not all farmhouses you know, or upper-middle class life — where people, real people, live in real streets like these. We put P K Dubey in a rickshaw. I was in another rickshaw looking at him, it was all hand-held cameras. And he came here in that memorable scene where he was rejected by Alice, his lover, and strips off all the style that he has put on — as a gadget freak that he is, as an event manager — is down to his kachchas and weeps as the kites fly across Jama Masjid.

• It must have been really tough. Early morning, we have collected such a big crowd.

Yes, but I like to do things unobtrusively and quietly, without much fanfare. People often don’t know what we are up to until it’s over. And that’s the secret.

• But you know, the documentary on Jama Masjid, the streets figuring in Monsoon Wedding, the work you have done on 9/11 movies — is there a sort of intellectually and ideologically continuing thread of thought? There is a curiosity about Islam, there is a curiosity about older civilisations, older ways of life.

You know, the big inspiration for me when I started out as an actor at the Political Progress Theatre was to see if art could change the world.

• I started out thinking that journalism could change the world. It hasn’t. Maybe art would.

Well maybe, so that’s the aspiration, that’s the original idea and that’s something I am still struggling with, I am still hoping to do. But I have had the privilege of making at least a couple of films that have made some kind of change, actual change in life. One, of course, being Salaam Bombay, which actually directly impacted the government policy on street kids. From the profits of the movie we formed the Salaam Balak Trust, and set up three centres for street kids. Now, we have close to 17 centres. So when I feel low and down — like what is my next inspiration, what can I do, can I do anything at all — I think of Salaam Balak and of the over 5,000 kids who have come through.

• So what makes Mira Nair feel low and down? What has made you feel low and down lately?

Well the Middle East is desperately what makes me feel low and down. The US elections make me feel, for a moment, comatose, and then I have to write again. The state of the world has never been any worse in my lifetime than it is now. Islamophobia is raging, the clash of civilisations that people are talking about is now here to stay and that makes me feel low and down. But also professionally, sometimes it’s very difficult. I have just been financing my new film, The Namesake, which is essentially a Bengali family’s odyssey from Calcutta to New York city...

• Which is based on Jhumpa Lahiri’s book.

This is Jhumpa Lahiri’s exquisite novel, The Namesake. You know, with my reputation — I have never lost money on any film, my films actually make a fair amount of money — and all that, it’s still difficult trying to finance The Namesake in Hollywood, which is essentially shot in New York and therefore quite expensive. I was told the other day by the head of a studio that this is essentially a non-Caucasian film.

• That’s funny, because I thought that the exotic was an in-thing now.

Well, the exotic is now an in-thing. But it comes at a very low-low price. If you start to talk about an American level of budget, it’s no longer interesting. It’s an economic issue, as always is with films.

• Not political, as it might seem at this moment.

What is not?

• Political in the sense that, is America getting more focused on itself, maybe under Bush II?

I think fortunately, the American people have much more elasticity and curiosity about the world than Bush’s Cabinet. So they actually do have this curiosity about the rest of the world, it’s the economics of film-making that one has to constantly struggle against if you want to do something that is against the stream. If I said yes to any number of movies I get offered, seriously...

• You said no to Harry Potter I believe?

Well, I was seriously quite honoured to be considered to direct Harry Potter, but...

• It’s more like sign-your-own-cheque Mira Nair.

It’s not sign-your-own-cheque anymore. It comes with a major price... When you have a big budget, like a Harry Potter, you have that many more people to answer to. You are simply one part of the machine that takes it over. It’s actually the freedom, the creative freedom, that is imperative for me. It comes only when the stakes are really low financially. That’s why I had total freedom to make a Salaam Bombay, or to make a Monsoon Wedding or to make a Namesake. I have complete creative freedom. That’s the joy of it for me. If you have a big budget, you have that many more men in suits to deal with.

• Tell me Mira, how do you make a $100 million, $200 million film out of this subcontinent, then it becomes a genuine mainstream international film? What do you do to achieve that, what kind of film would that be?

I don’t think it’s about the budget. I don’t think it’s about making a $100 million film.

• I have told you the turnover, a film that grosses that much.

Frankly, I am not the kind of filmmaker who would think of the box-office. I always think about the Bhagwad Gita: beware the fruits of action. So there is no formula. I want to make a $100 million film, what do I do? For me, it’s not something I can think about, I can only respond to my own inspiration.

• But what will it be? Will it be a story, or will it be an increased level of sensitivity or understating of the subcontinent, or curiosity about the subcontinent?

The big lesson that I learnt from Monsoon Wedding, which I really thought was going to be an intimate family flick, was that it became something which was so specifically local that it became universal, and everybody, from Iceland to Hungary to Southern California to India, really responded to this small — actually, it was quite a large film, but made on a very tiny budget. For me, that kind of universality, that idea of the human being being understood in such a deep way that it can transcend borders — that also amounts to box office success.

• You use so much Hindi film music. Usually, people say if you really want to do well internationally, you have to break away completely from the formula, the Hindi film formula is music...

I don’t agree, I really don’t agree. I think it’s the way music is used. For me, when I first made, for instance, Salaam Bombay — it was actually the first Indian film to gain a wide commercial audience — I had a number of Indian director friends coming to me and saying I have Sean Connery, I have Michael Caine and now I am all set to make an Indian-international film. That was 15 years ago. I said it was a wrong way to approach things. It’s not how we eliminate music or how we put in white actors that will make an international film. It is really the blood and sweat, the inspiration and the craft also.

• In fact, the song you used in Monsoon Wedding, Chunari-chunari — now people think it’s a song from Monsoon Wedding and not Biwi No 1.

David Dhawan, the director of the film, salaamed me last week, thanking me for making his song popular again. For me, it’s the pulse, and I have a good ear. I love music and I know. Often my soundtracks are decently successful for that reason, that I can pick songs that mean a lot to me but can also mean a lot to other people who listen to them.

• How did you pick some of these for Monsoon Wedding?

You know, I live with this wonderful man, Mahmood Mamdani, my husband, who knows every lyric of every ’50s to ’70s film songs, from Kabhi, kabhi to Abhi na jao chod ke or Aaj phir jeene ki tamanna hai. Any of the sweet melodies of Geeta Dutt or Manna Dey or Mukesh is a part and parcel of our family vocabulary.

• It’s like knowing the score of every cricket match in the world.

Cricket and music make a good formula.

• What was the most interesting thing, most fun thing, that people said to you when they saw Monsoon Wedding, particularly among your western audience and critics. Did you get married like that Mira? That sort of thing.

Oh, that is an Indian thing. One of the most beautiful things was that I was giving a lecture at Harvard’s memorial theatre, which is sort of our fancy theatre there. A thousand people were listening. A young man in the audience got up and said, ‘how did you know to make a film about me, how did you make a film just for me, how did you choose every song that is my favourite song?’ He said, ‘I am from Pakistan and you have used this beautiful song which I would like to offer to you.’ And in the middle of a thousand people, this young Pakistani guy sang Aaj jane ki zid na karo. I loved the song and I loved his voice. I always think that westerners should be educated about the refinement and the depth of our culture and music. Two days from now, I am going to Pakistan as this man’s guest to speak about my work.

• It’s so marvellous how music, art, cinema in particular, cuts across our borders.

Music knows no borders and excellence knows no geography.

• That’s why I think one of the great tragedy of our times has been Nusrat Fateh Ali Khan’s death at such a young age, when India had just discovered him.

Well, his voice will live on. And his voice inspires. I mean, look at this great Sufi Sikh, Rabbi. To me, his work can really aspire to a Nusrat Fateh Ali Khan’s.

• Who is this?

This is this great new singer called Rabbi whose music I have just heard. He has a wonderful new CD called Rabbi, Rabbi. It was inspiring.

• So can we look forward to hearing some of that in your next film?

Well, this film that I am co-producing, Zoya Akhtar’s film called Luck by Chance... Zoya is using Rabbi’s music as the main song in her film.

• Mira, you have been watching the film scene in India. How do you see the Hindi film evolution in India — I refuse to use the term Bollywood? Do you think it’s bridging the gap with Hollywood? Or do you think it’s going its own way, but maybe becoming technically more savvy?

I think the remarkable thing is it is becoming technically completely slick, comparable to international standards of technical achievement, which we never had before, you know 25 years ago. What I miss extraordinarily is the sweetness of the music we used to have in the ’70s and the ’80s.

• Some of the music is inane now.

It is deeply inane. I think when the computer comes into the musical establishment, as in the writing establishment, as in the whole cut-and-paste number... In Juhu, they say ‘sahab to cutting-pasting mein hai ji’, which means that they are literally taking a phrase of song and repeating it a hundred times, and there is the drum beat and it becomes completely duplicatable, like anything else. That’s the shame.

I get inspired by a number of young people who are not dynastically related to the great cinema family, who are now having the energy to make a Monsoon Wedding. That’s why I made that film, to inspire young people, that if you have something to say (which is most important), you have craft and discipline, you don’t need millions of dollars to make a good story.

• Do you not believe that to get international acclaim, or to do well internationally, Indian film industry has to become like Hollywood?

I really would lament that, because I believe what we have is our own inimitable cinema vocabulary. And if we constantly want to adhere to something that will become more palatable to the west, we will lose that vocabulary.

• In fact, I was reading the text of one of your lectures where you had said that Indian cinema has the same suppleness and muscularity that Indian culture does, and it would be tragic if we ‘Hollywoodise’ too much.

I really think then we would be between a rock and a hard place, and we would just fall in the crack. That would be such a shame. Let’s just face facts: our Indian cinema audience is now bigger than the Hollywood audience. So it’s not about wanting to be what they are, it’s about them opening their eyes to us — which they are increasingly. I have actually bought the remake rights of Munnabhai MBBS, my dear friend Vidhu Vinod Chopra’s wonderful blockbuster last year.

• Doing it in English now?

I have sold it to Twentieth Century Fox. I am producing this film, an African-American version of the film. It’s going to be called Gangster MD. And I hope to have Chris Tucker.

• How will you have ‘bole to’?

We will have another kind of bole to. But it will again be a confluence of African-American and Indian actors, something I did more politically in Mississippi Masala with Denzel Washington, but now with a comic vein. So that’s the new kind of marriage that I am interested in, where Hollywood is buying Bollywood in a way.

• It’s a very interesting argument because Shekhar Kapur said on this show that now the Asian audience is becoming so big that Hollywood will have to change, and it’s a famous line, or an oft-repeated line, that one day Spiderman will take his mask off and it will turn out to be an Indian or Chinese. On the other hand, I have Ashok Amritraj saying no, if you want international acclaim then Indian cinema has to ‘Hollywoodise’. You cannot make a film, say even like Lagaan which is a nice film, and expect to win awards. Those are the two extremes of the debate.

I have always responded to my own inspiration, I have always marched to my own drumbeat, you know, from making Salaam Bombay, for which there was no role model, no mentors. You know, I was sharing an editing room to save money with Spike Lee, who had just made his first film, She is Going to Have It. I was saying to Spike that you can open the window because African-Americans are here and you have an audience, I don’t even have that audience as I am making a film on street kids in Bombay. But look at what happened to that film.

So, you know, I have always marched to my own drumbeat, from making Salaam to Mississippi, which was the first inter-racial love story — African-American and Ugandan-Asian — which also highlighted the racism in the Indian community, that’s something that people don’t want to see, or don’t want to deal with.

• If you see South Africa, Indians who were in the forefront of ANC... Like one immigrant, once they became successful they turned right, isn’t it?

Sadly yes, and for me films are a mirror, or should be a mirror to the world.

• Then African-Americans become kala...

Not become, that’s what is our great, great weakness, this separatism, this living just for ourselves rather then working with the community. The extraordinary irony in making Mississippi Masala was that the African-American community and the Indian community were remarkably similar — in their love for family, in their communal sort of way for operating, in religion even, in that sort of emphasis on family bond and God for instance. But would an Indian ever cross the track into an African-American family? No way. So in terms of my work I am pretty much a maverick and I follow my own heartbeat.

• Now we have you, we have Shekhar, we have Gurinder Chadha, we have Deepa Mehta, we have Ashok Amritraj at another level, as a producer. So what do we see? Do we see our ranks growing or do we see some of you struggling? At least I see two of you struggling now, not you.

I was joking with Gurinder that I am the senior and the founding member of the Charlie’s Angels from Punjab. I am Charlie’s Angel Number One, she is Charlie’s Angel Number Two and the Charlie’s Angel Number Three slot is wide open.

• So will that slot will be filled by one more maverick like you or do you see more of the mainstream Hindi filmmakers moving in that direction?

Maybe Karan Johar is Charlie’s Angel Number Three.