Slumdog Millionaire, the new film by Danny Boyle, serves up Bombay’s heart on celluloid. A febrile, filthy city with one foot in the grandeur of its colonial past, another in its glass-plated future, and the rest of it struggling to make sense of its present. Even its name is a split personality: Mumbai to modern India but still Bombay to much of the rest of the world, including Britain, the country that created it.

The islands that make up the city were seized from a Gujarati sultan by the Portuguese in the 16th century but soon were ceded to Charles II as a dowry for his Portuguese bride. In turn he leased the islands to the British East India Company, which discovered the deep water harbour that would turn Bombay into a true metropolis.

Its British origins garland the city, from the Gateway of India, which was built to commemorate the arrival of George V, to the arches of the first railway station built in the colony. The Gateway looms over the colonial-era Taj Mahal Palace hotel, one of the scenes of yesterday’s carnage, but the hotel was a protest, not a product of colonial rule. Jamsetji Tata built the luxurious hotel after he was refused entry to the British-run Watson’s Hotel, as it was “whites only”.

Bombay was to become a base for the Indian independence movement in the dying days of the empire, hosting Gandhi’s Quit India movement. But Bombay has always stood apart from the rest of India, by far its most outward-looking city with ferocious capitalist aspirations. Thousands of Indians leave villages all over the country every year to follow their dreams to the big city. Many end up on the streets, as beggars or prostitutes.

Times Archive, 1911: The expansion of Bombay

Bombay stands unchallenged as the great commercial capital of India, distinguished by its enterprise, sobriety of thought, and unity of endeavour

• The name "Bombay"

• The name "Bombay"

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A battle for possession of the city left fault lines that remain today. The Gujarati merchant classes lobbied to have it made an independent city state, but Marathis, the original ethnic group of the area, succeeded in having it incorporated into their state in 1960. More than 100 people were killed by riot police in the protests that followed. Bombay exploded into riots again in 1992, when 900 people, mostly Muslims, were killed in fighting between Muslims and Hindus — 200,000 Muslims fled their homes, though most later returned. In 1993 it was in flames again with a series of bombings co-ordinated by Dawood Ibrahim, the don of a crime and terrorism syndicate. Most of the attacks since have been linked with him. He has links with Pakistani-based Kashmir militant groups and lives in Dubai.

Bombay was stunned in 1995 when the election of a new Maharashtra government brought them under the rule of the far-right Hindu Shiv Sena party, one of India’s most xenophobic. It renamed the city Mumbai, its Marathi name, as part of a policy to expunge the British colonial legacy.

Shiv Sena has regularly waged campaigns against insidious Western influences such as the celebration of Valentine’s Day, on which they smash up card shops and separate young couples. The group has also been implicated in attacks against Muslims and northern Indians. But Islamic militants are the ones blamed for most of the recent violence, including the devastating railway bombing of 2006.

Still, the city’s extraordinary growth has hardly been hindered by the recent violence and it has continued to attract talent from all over the world. American bankers sniffing out investment opportunities join Southall girls seeking fame and fortune in Bollywood in a new migration, following in the footsteps of the Arab traders and Persian Zoroastrians of the past.

It may be home to a shady underworld, Islamist terrorism, poverty and prostitution. But it is also home to the headquarters of all the most important financial institutions, multinational companies and the world’s largest film industry. All those have kept it a cultural melting pot. An assault on outsiders is an assault on its soul.

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