To inhale Salman Rushdie's richly textured, exotic prose is to realize the insipid nature of most contemporary fiction. Moreover, Rushdie's new novel, Shalimar the Clown, draws upon the most fraught issue of our time: the turmoil generated by different cultures and faiths trying to exist in the same place.

In Shalimar, that particular place is Kashmir in northern India, an area also claimed by Pakistan. Known for its extraordinary beauty amid the Himalayas, Kashmir for decades has been the site of brutal fighting between the Indian army and Muslim insurgents. Although the population was divided by religion, the Kashmiri people once existed together: Muslim and Hindu. Tragically, this détente has fallen victim to religious fanaticism and military goals.

The genius of Rushdie's new novel comes from the writer's ability to illuminate a global disaster through a microcosm. Two Kashmiri neighbours, a handsome, gentle Muslim boy and a beautiful, wild Hindu girl, fall desperately in love as teenagers. Although there is religious and governmental carping, their families accept their love.

Both Hindu and Muslim marriage traditions are celebrated, and harmony appears to reign. The boy, Shalimar, is a clown in a traditional acting troupe led by his father. The girl is a luscious young professional dancer. In Kashmir, the tolerance of neighbouring, multi-faith villages of performers and cooks has permitted the Hindu-Muslim love marriage of a dancer, Boonyi Kaul, and the actor, the high-wire artiste and clown, Shalimar Noman. Later, massive state repression, inter-communal violence and increasingly fanatical religious ideologies turn the traditional magical vistas into a bloody Himalayan dystopia.

In his bid to globalize the troubles of Kashmir, in a sort of effort to universalise the conflict between religions and community groups, Rushdie weaves in a Jewish American called Max Ophulus, the anti-Nazi war hero and immigrant to the US, a servant of his adopted country's overweening, amoral might", and supplies terrorists with cash, cachet and coups. While his daughter, named India, is exploring his past, she discovers that she was born to an Indian woman called Kashmira. Having woven this vast, worldwide web of characters, Rushdie suddenly switches gear and seems to be in a hurry to wrap up the mat and conclude the story. So we return to things South Asian, and the fire is rekindled.

Shalimar the Clown is a brilliant symphony with some bum notes. Its shuddering epiphany and dynamic immediacy are exceptional, and the characters of the villagers are drawn with humour, intelligence and intense emotional power. With fewer of the stylistic irritations of his previous fictional works, this is one of Rushdie's best novels yet. The horror that it depicts demands to be screamed, word by word, at the minarets, temples, steeples and congresses and conferences of those who facilitate killing, rape and torture – and at those who, unlike Rushdie, have not the courage to ask of their rulers, of their religions, of themselves: why is that?

Appropriately, this novel is both deeply disturbing and immensely moving. Salman Rushdie the Kashmiri writes from the heart as he describes this dark incandescence. His prose, like Kashmir, is an exquisite, broken thing of pain and beauty. In an earthy, poetic Sufism, he captures perfectly the existential intimacies between lovers and between people, song, dance and land.

Too often, the magical-realist style spins the banal into the preposterous, the jabberingly tedious, rather than the enthralling. And so it came to pass that five-and-twenty years on, in Anglophonia, this once revolutionary type of writing just feels formulaic, passé, unengaged.           –Frzana Rizvi