Gurinder Chadha, the director of the sparkling Bend it Like Beckham, is making It's a Wonderful Afterlife, which has been described as "My Big Fat Greek Wedding meets Shaun of the Dead". My teenage daughter is dying to see it and, with her mates, loves "Jai Ho", one of the songs from Slumdog Millionaire. Composed by A R Rahman and Indian songwriters, the ditty was later Anglicised and released by the Pussycat Dolls, whose lead singer, Nicole Scherzinger, is Filipino/Russian/ Hawaiian/German/American. The singer and song of our Obama times pleasures the millions who are drawn irresistibly to amusing farragoes. Cultures and styles cross continents from west to east, north to south, with the ease of a warm breeze. Or a cheap plane ticket. It is all very thrilling.

High art is less hung up about purity and sanctity. The Salisbury International Arts Festival, programmed for Middle England, recently featured a stirring performance by the tabla player Kuljit Bhamra and other Indian artistes at Stonehenge. In the newly-opened classical music hub, Kings Place in London, they had a week in Spring of "East meets West". That fateful meeting took place at least four centuries back, but evidently when artists from the two spheres make music together, it is still a big deal and sounds bigger than the parts.

Fusion in art and popular culture is back. Arguably, it has really never gone away. Cross-fertilisation has gone on since human groups found or heard of others unlike themselves. Tim Bridgman, who has studied musical traditions, believes "pure music has not existed in western Europe since the middle ages". In Vaughan Williams you find Celtic music and in English ballads traces linger of old black Delta work songs. The critic and broadcaster Alkarim Jivani takes a similarly long view. Britain's culture perpetually evolves, is audaciously derivative and yet stubbornly denies this obvious truth. Nash's Greek columns and Neoclassicism have been turned, for example, into the nation's "traditional" aesthetic and scant attention is paid to Britannia's irrepressible cultural promiscuity and her ingestion of, among others, Egyptian, Ottoman, Indian and Persian, Chinese, later Japanese colour, design, crafts and visual sense. All of our great museums are repositories of creative miscegenation yet some reputably deep thinkers today reject the flux and mix of history and insist that globalisation or multiculturalism or post modernism have ripped into chaste national narratives leaving them torn and fatally wounded. And as Fascism gains popularity in old and fatigued Europe, expect more vociferous calls for cleansing and purification. That, in turn, will, for sure, fire up a fresh counter offensive of subversive cross-breeding in art and culture.

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Post war generations reawakened their creative spirits by experimenting and crossing boundaries. The greatest moments of integration came, says Jivani, when a "moribund art form had to invigorate itself, save itself from atrophy". Top black artists like Miles Davis, agrees the jazz writer Clive Davis, injected new ideas and energy into an exhausted jazz vocabulary. It made financial sense too –working with white talent helped black artists break into a bigger market. The Beatles, Rolling Stones, Hendrix, and later Paul Simon used traditional African beats to express new sounds, new freedoms. The recent enthralling BBC4 documentary on Chris Blackwell and the Island record label was an ode to those breakthrough times and expansive minds.

There have also been less illustrious moments. The massive influence of Indian classical music on pop in the Sixties and Seventies is well known. Much of it sounded lazy, lacking in aesthetic theory and drained of all political and social content but the punters loved it because it promised peace and love. It extended an invitation to ingratiation to previously despised subject people and they grabbed the offer – even those who were supreme talents in their own world. Ravi Shankar and The Beatles fell together at a time when British racism was at its most vicious. So fusion has a long and controversial history.

However today it is bigger in scale, overwhelming, more heady (and less discerning) with fresh waves of enthusiasts washing up and shaking off memory, form, tradition, discipline, the laughable idea of territorial integrity. Bollywood imitates Hollywood and vice versa; British artists, musicians, filmmakers and designers meld and marry influences just like the revivified British Kitchen has successfully done with food.

Everything in the arts now, it seems, has to be spiced up, blended, mashed together, emulsified, or lifted with cosmopolitan flavours. The public appetite grows for smoothies, easy and fast to swallow. It is pure entertainment with a global reach. Think of the money. In the speedy post-millennium world, never still, perpetually in motion, seeking instant gratification and novelty, is this surge any more than the fizz in a coke bottle?

Perhaps the world rushes towards manufactured unities to reassure and divert us from global chaos and violence and the way we now fear each other. The more divided we become, the more we must believe we are really, really connected.

The worry now is that the concept could soon buckle with the strain of carrying so many disparate meanings – some contradictory – and market pressures. "Fusion" for example, describes Chadha's populist pastiche Bride and Prejudice as well as the new, colourful production of Wuthering Heights by theatre company Tamasha, which transports the story to Rajasthan using both Bollywood and British musical theatre styles, a combo previously served up in Bombay Dreams. Audiences do love such productions of borrowing and cheek. Yet fusion also describes intellectual art that deliberatively subverts expectations and identities and would include the RSC, which under Michael Boyd courts international appropriators of Shakespeare and Yinka Shonibare, a Brit artist of Nigerian ancestry who dresses headless figures in Victorian clothes, lace and all, only in bold African fabrics.

Fashion steals and adapts from across the seas with panache, always has done, only now there is a glut on the one hand of hotchpotch styles – boho, "tribal" and "east meets west" kitsch (think Sienna and Liz Hurley) and on the other, the artistic designs of say, Hussein Chalayan, Turkish and British, whose distinct selves coalesce exquisitely in his unique creations.

In music too, you get some dreadful blends flooding the marketplace, so too exciting and hopefully enduring marriages of style and content. On offer are garish sound cocktails of Primark quantity and quality, a startling dumbing-down from the relatively sophisticated, yet unapologetically popular perennial stars like Eric Clapton and Jools Holland who draw and improvise from a seemingly infinite musical palate. Thankfully, that tradition has attracted new converts and relationships, curious, brilliant and inventive. They duet, converse from across different world views as they do in the beautiful album, Tell no Lies, released last month by the Etonian guitarist Justin Adams and the Gambian fiddler Juldeh Camara. It is indescribable, the feast of sound they offer. In the same vein, Davis recommends Kronos Quartet's Floodplain, which mixes classical vigour with folk and traditional music from the Balkans, Middle East and the horn of Africa.

Thankfully excellence fights back, is not (yet) wiped out in this age of cheap "multicultural" thrills. Like the old black American Blues and Jazz musicians, current African and Arab musicians need western encouragement and participation. Crossovers and cooperation increase sales (you double your fan base).

Freed from holding pens of tradition, good artistes can release extraordinarily original work. Some were showcased by Africa Express, which brings together Western and African musicians in unrehearsed collaborations, in part as a rebuke to Live8 which marginalised African talent while trying to raise cash for the continent's poor, the most condescending manifestation of One World ever. The BBC's Electric proms gave the talent further affirmation. Some star gigs join the constellation of collective memory – like Franz Ferdinand and Senegal's Baaba Maal; Johnny Marr, the ex-Smith's guitarist reaching new heights with Mali's legendary Miriam and Amadou.

In the theatre, there are fresh green shoots of hybridity at play, written and directed by a new generation who are by nature cosmopolitan, even though their roots go back to old ancestries. The Royal Court breeds and nurtures such talent and cultural copulation, animating outlandishly unfamiliar stories in conservative Chelsea. Take the Olivier winner Bola Agbaje, a young Anglo-Nigerian playwright, whose acclaimed Gone too Far! was a tragi-comedy about two teenage Nigerian brothers, one brought up in Britain, one in Nigeria, meeting for the first time in London. It was directed by Bijan Sheibani, half Iranian, half English, who runs ACT (Actor's Theatre Company), an alchemist inspired by Peter Brook. His unique plays come together after actors, writers, designers, dancers, musicians of myriad backgrounds go through an intense process together, over many long weeks.

Once upon a time white novelists – the Ian McEwan generation – either avoided multiracial Britain as if it wasn't quite their business, or wrote about it from a distance, a view they saw while safely on a train. Some saved their passion for an old Blighty long gone. Now that nervousness is gone and we have novelists who go way beyond empathy to absorb the Other. Maggie Gee (White Family, My Cleaner, My Driver) and Stella Duffy (The Room of Lost Things) are among the best of these.

In British Caribbean fiction, although there are fewer new voices than we might expect, the known names are molecularly transformed - from writing about historical injustice, exile, settlement and longing, they are injecting themselves into the nation's blood, painful though it may be. The BBC producer Tony Phillips, brother of Caryl Phillips the novelist, remembers the old struggles. As a newly qualified actor, he was rejected by York's Theatre Royal because that city did not have a "multicultural community". Now, he says: "I find myself in the strangely uncomfortable position of having to show my daughters how to make a St George's flag. They belong, and thank goodness they have that confidence." It is the journey from Andrea Levy's wonderful Small Island to Caryl's new novel, In the Falling Snow, in which Keith, the black British hero is irreversiblyV CEnglish, married to an Englishwoman whom he betrays as if he wants to excise that part of himself. Only he can't: there is his child, and hers, miscegenation made flesh.

These compositions of multiplicity and integrity are not amalgams produced on demand. They are emphatically not the result of contrived integration, the multicultural tick box, what Jivani contemptuously labels "PC" arts practice. One such cited by Davis is the ENO's Voxygen project with Talvin Singh, a dissatisfying project, I agree, that felt like a cut-and-paste job that did a disservice to both sides. Singh needs to exercise better judgement on what best showcases his supreme gifts and complex works.

Some artists – and they include those who have worked with Singh – are choosing to ditch the messy category of "fusion" altogether. Like the ethereally-beautiful Mayuri Boonham, Bharatnatyam dancer and choreographer with the Angika dance company admired for extending the language of dance. "Fusion is not a word I like. It implies forcing things to come together where the origins of the forms being fused are often lost or thinned out ... there is a loss of essence and resonance resulting in the Sellotaping of different styles for the sake of something apparently different or new. I prefer the word 'synthesis' – one single work expresses several symbolic ideas, combining them into a complex whole."

The choreographer Shobana Jeyasingh is as "allergic" to what she says is "un-rigorous, easy bolting on of opposing elements. The word 'fusion' implies an overdefined authenticity, it is an outdated word which does not reflect the reality of the 20th century to-ing and fro-ing". She prefers to describe her own complex creations as "hybrid; it has an autonomous life and power of its own rather than be a sum of parts and it allows for edginess and tension".

That creative tension is vital to the novelist and dedicated musician Amit Chaudhuri. So too are the awakenings of various selves within the self, which is a condition of modern life. He lives in India and the UK. Epiphanies mark his journey of self discovery. As a young man he was into rock and jazz, which he felt obliged to excise from his inner repertoire as he took up classical North Indian music in the Eighties, an act of reclamation perhaps. Within a few years he experienced as series of "mishearings" where listening to one tradition, another would speak up in his unconscious, or pick up echoes: "When I was practising the raga Todi, for example, I heard the riff to Clapton's 'Layla'." That led him to wider questions, unexamined beliefs about identity and the conviction that "fusion" is a scandalous or liberating departure from canonical traditions. His new collection of songs (out this month) is titled This is Not Fusion, a provocation and rebuff to players of the past like Mahavishnu who projected east and west as inert, static categories. "There was no history, neighbourhood, by which I mean a texture, sounds of, sense of a place. There is no quarrel within fusion, no inner tension and therefore no development." Like Chaudhuri, Boonham and Jeyasingh use this struggle and make torpid elements pull together to flash and burn bright.

Sometimes a casual, delicate embrace inspires profound understanding and complex composition. Take the poetry of the prize-winning Daljit Nagra, who word-sculpts using his many-parted sensibility. In Look We Have Come to Dover! Nagra naturalises Punglish (Punjabi English) whilst working with the golden threads of his canonical antecedents – Auden, Browning, Blake and Milton.

No tortured soul-searching or intense introspection went into the making of Diversity, the dancers who won Britain's Got Talent. They are coolly and instinctively open to the world. So too are the pop group Cornershop which absorbs influences from far and wide – popular playback Indian singer Asha Bhosle as well as Allan Ginsberg among many others. If you tried to separate out the various ancestral arteries feeding the work of the British Asian composer and musician Nitin Sawhney, he would be undone, rendered lifeless.

At the other end is dangerous art which treads into battle trenches, clears out old enmities and plants hope in that compost. Inherited antipathy is wearing and many young folk cannot stand the obligations it imposes of separation and suspicion. Watch MuJu, the experimental company being mentored by the imaginative Nicholas Kent at The Tricycle Theatre. A gang of British Muslims and Jews writing and performing plays, sketch shows, and developing a shared space and sense. This is fusion as liberation. Sustainable? We will see.

Back to Slumdog Millionare then, just out on DVD. The energy and honesty, realism on speed, was created through intense Indo-Brit collaboration and a chemical reaction between the two. For commercial reasons the makers softened the impact and so gave us "Jai Ho" and line-dancing at a Bombay station. Modern "fusion" is such a broad church, it includes both manifestations and various forms of infusion, diffusion, transfusion, confusion. No wonder so many people are turning off the very idea.