There remains one thing that even he can't fix, however: our hunger for Hollywood hokum. Merchant, usually a bubbly presence with an infectious laugh, turns momentarily grave as he laments the rise and rise of lowest- common-denominator Tinseltown blockbusters. "I despair that we've brought culture down to such a low level, so that everything has become about greed and money," he sighs. "Look at the films of George Cukor or Billy Wilder or Alfred Hitchcock - they told us something about our lives. What Hollywood is creating now is a philosophy of 'Let's make the maximum buck in one weekend'. I'm sorry, but I don't subscribe to that."
Too true. What he does subscribe to is a meticulous method of film-making that prizes mind over money. Ever since he first collaborated with American director James Ivory 35 years ago on a version of the novel, The Householder, by Ruth Prawer Jhabvala (who, as a scriptwriter, has since become an essential part of the team), Merchant has aimed to trade in film's most durable currency: ideas.
The hallmark of a Merchant Ivory production, he maintains, is that "We say something through our films that you could remember in a hundred years. Special effects and car chases are forgotten in one weekend."
Typically, Merchant Ivory have expressed their ideas through exquisitely made period adaptations - A Room with a View, Howards End, The Remains of the Day. These supremely tasteful movies have not been to everyone's liking, however. In a comment that has haunted Merchant Ivory for 10 years, Alan Parker dubbed their work "The Laura Ashley school of film-making", and the highly respected critic David Thomson opined that "The loveliness of Merchant Ivory gives me the creeps".
Now, the young British director Gary Sinyor (Leon the Pig Farmer) has seen fit to make a spoof of the Merchant Ivory style called Stiff Upper Lips, which will be released later this year. Sinyor has outlined his motivation thus: "I was angry about the way period drama is regarded as the only thing we should ever make in this country. American distributors asked me, 'Are you sure you want to do contemporary comedies? Don't you want to do period dramas?' I also remember James Ivory saying at the Baftas that he didn't see why any British writer should think of doing anything other than adaptations from the wealth of great British literature. I fumed at the screen."
Merchant is tickled by the idea of Stiff Upper Lips; after all, parody is the sincerest form of flattery. He is less pleased, though, about those who pooh-pooh period drama. "People have latched onto what Alan Parker said like they latch onto Princess Diana," he complains. "It's irresponsible of journalists to keep repeating Alan Parker's remark for 10 years. Why not credit us rather than jumping on the Alan Parker bandwagon? We're the only people who have looked into British culture with penetrating eyes. We've had 33 Oscar nominations and nine winners."
Obviously a man used to fighting his corner, he carries on, at a loss to explain why people question Merchant Ivory's frequent use of EM Forster as source-novels. "Why not EM Forster?," he asks. "He should be lionised and have streets named after him. Who has done more for English literature?
"People have copied us. When Jane Austen came into fashion, it was because Merchant Ivory had set the standard. And look at the actors we've introduced - Felicity Kendal, Helena Bonham Carter, Hugh Grant and Emma Thompson."
Kendal first came to our attention in Merchant Ivory's Shakespeare Wallah in 1965, which centres on a troupe of actors endeavouring to perform English stage classics in post-Independence India. It has been reissued in a triple bill - alongside Autobiography of a Princess from 1975 (Madhur Jaffrey recollecting the glory of the Maharajahs) and 1982's Heat and Dust (Julie Christie seduced by India) - to mark the 50th anniversary of Indian Independence. Merchant expands on the significance of the trilogy. "History has layers, and each decade you peel away a new one. This is Merchant Ivory peeling away those layers."
Merchant is an effervescent character who peps up film-crews with wonderful, communal curries that he spends days preparing. He is evangelical about period dramas. "What is the fascination of, say, Jane Austen?" he wonders. "The answer is that she has good stories that people can relate to. People always want love and affection to win and the heroine to get the hero. That gives you a delight which blood and special effects never can."
Unlike many critics, Merchant cannot envisage a time when audiences will finally run from cinemas screaming, "Let me out, I can't take any more bustles and bonnets!" "If people want to see those films, what's wrong with that?", he concludes. "People will never tire of period drama, because if you're telling a good story, people never get tired."
'Shakespeare Wallah', 'Autobiography of a Princess' and 'Heat and Dust' are playing at the Curzon Mayfair (0171-369 1720) and the Cambridge Arts Cinema (01223 504444) this week
1930s: Born in Bombay, the son of a textile trader. His nine- strong family lived in just two rooms. Educated at St Xavier's, a Jesuit school. First fell in love with cinema when an Indian actress walked him round Bombay film studios as a 10-year-old
1960s: After a Masters degree in business at New York University (where he shot his first film, a 14-minute short which was Oscar-nominated), he met director James Ivory through Saeed Jaffrey. Since The Householder in 1963, they have made 38 films together over 34 years. They now share a house in Claverack, upstate New York
1970s: Highlights included: Autobiography of a Princess (1975), The Europeans (1979) and Jane Austen in Manhattan (1979)
1980s: Merchant Ivory made their big breakthrough with A Room with a View (1986). Other acclaimed productions: Heat and Dust (1983), The Bostonians (1984) and Maurice (1987)
1990s: Howards End (1991) picked up three Oscars. Among other notable films were: The Remains of the Day (1993), Jefferson in Paris (1994), and Surviving Picasso (1996). With homes in Bombay, Paris, London and New York, Merchant is currently making A Soldier's Daughter Never CriesReuse content