In 1961, Merchant and director James Ivory formed the film production company Merchant Ivory Productions. Merchant was also Ivory's long-term life partner. Their professional and romantic partnership lasted from the early 1960s until Merchant's death in 2005. Their partnership has a place in the Guinness Book of World Records for the longest partnership in independent cinema history. Until Merchant's death in 2005, they produced nearly 40 films, including a number of award winners. Novelist Ruth Prawer Jhabvala was the screenwriter for most of their productions.
In 1963, MIP premiered its first production, The Householder, based upon a novel by Jhabvala (she also wrote the screenplay). This feature became the first Indian-made film to be distributed internationally by a major American studio, Columbia Pictures. However, it wasn't until the 1970s that the partnership "hit on a successful formula for studied, slow-moving pieces ... Merchant Ivory became known for their attention to period detail and the opulence of their sets". Their first success in this style was Jhabvala's adaptation of Henry James's The Europeans.
In addition to producing, Merchant directed a number of films and two television features. For television, he directed a short feature entitled Mahatma and the Mad Boy, and a full-length television feature, The Courtesans of Bombay made for Britain's Channel Four. Merchant made his film directorial debut with 1993's In Custody based on a novel by Anita Desai, and starring Bollywood actor Shashi Kapoor. Filmed in Bhopal, India, it won National Awards from the Government of India for Best Production Design and special award for the lead actor Shashi Kapoor. His second directing feature, The Proprietor, starred Jeanne Moreau, Sean Young, Jean-Pierre Aumont and Christopher Cazenove and was filmed on location in Paris.
Of his partnership with Ivory and Jhabvala, Merchant once commented: "It is a strange marriage we have at Merchant Ivory . . . I am an Indian Muslim, Ruth is a German Jew, and Jim is a Protestant American. Someone once described us as a three-headed god. Maybe they should have called us a three-headed monster!"
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