The Serpentine Gallery’s new exhibition goes by the presumably ironic title of “Indian Highway”. The phrase implies a straight-line journey when in truth this is a show that travels the length and breadth of the Indian subcontinent’s cultural landscape. Jointly curated by Julia Peyton Jones, Hans Ulrich Obrist and Gunnar B. Kvaran of the Astrup Fearnley Museum of Modern Art in Oslo, it explores highways and byways, city and country, overground and underground alike.

“Indian Highway” is Britain’s first serious exhibition devoted to the full range of contemporary Indian art. The Serpentine might be one of London’s smaller modern art galleries, but under the confident stewardship of Peyton Jones, it has become enormously ambitious. Too ambitious on this occasion, it might be thought, since the list of exhibited artists is so long that it is hard to imagine how they might all be accommodated within the elegant but restricted gallery spaces at her disposal. Yet somehow the feat has been managed.

The show has been allowed to spill over into every last nook and cranny of the Serpentine’s parkland pavilion, occupying lobby and foyer and education room and spreading outside as well. Part of Kensington Gardens themselves were colonised, for the show’s opening few days, by an engaging performance artist named Nikhil Chopra, whose various activities included pitching a tent in the park and dressing up as a frock-coated Indian postmaster from the days of the Raj – complete with waxed handlebar moustache – to unwrap a number of twine-and-burlap-wrapped packages addressed to himself. A wry reflection on the very nature of travelling art exhibitions, even perhaps “Indian Highway” itself, was to be inferred. Like Chopra’s little bundles, each work of art in the exhibition is indeed a package sent from a distance, loaded with implications about national identity, past and present.

The work of M.F. Husain, modern India’s most celebrated painter, is encountered both inside and outside the gallery. Husain, now in his early nineties, is a fascinatingly unruly character. He paints in a style reminiscent of that of Picasso in the Guernica era, while his approach to narrative is self-confessedly coloured by that sprawling Indian epic, the Mahabharata. The outside of the Serpentine has been effectively boarded over, in homage to Husain. The result is a circuit of inside-out walls – effectively doubling the gallery’s exhibition space – which have been hung with a highly idiosyncratic miniature retrospective drawn from a lifetime’s work. Husain’s works are dense, often highly politicised allegories of life in post-partition India, enacted by a polymorphic cast of human and mythological characters. They are represented, here, through the ingenious medium of high-density weatherproofed reproductions – hung high up, presumably to discourage the attentions of Kensington Garden’s squirrels (or any other vandals). The effect is undeniably odd, since these images are actually billboards of paintings rather than paintings themselves. But it is in perfect accord with Husain’s belief that it is art’s primary duty to communicate about the things that matter. Inside the gallery, he has contributed a pair of new oil paintings, including The Rape of India – an explosive burst of acid colour inspired by the recent terrorist attacks in Bombay, painted just two days after the events themselves. Husain’s painting owes a debt to Picasso, and the resemblance does not stop there. He has now almost reached the same age as Picasso, painting all the while with an angry old man’s determination to rage against the dying of the light.

Husain’s most recent paintings share the largest interior space at the Serpentine, the North Gallery, with Sheela Gowda’s so-called Darkroom – an oil-stained mock-altar formed from tar drums glued together with asphalt – and a powerfully engaging mural by N.S. Harsha. Harsha’s work looks, at first glance, all sweetness and light. A crowd of life-sized contemporary Indians, rendered in deft lines and a palette reminiscent of watercolour, might almost have been copied from the illustrations in a children’s story book. They stare out at the viewer, challenging another, closer look. On further inspection, troubling details crowd in on all sides. A gun goes off and a white bird – Benazir Bhutto’s alter ego? – is fatally wounded in its feathered breast. Knives are out between Moslem and Hindu. An angel wheeling overhead turns out to be no such thing but, instead, a falling clown.

In an adjoining gallery, Shilpa Gupta’s In Our Times is a bleakly symmetrical work of art – part sculpture, part sound piece – inspired by the partition of India and Pakistan. Two microphones swing like a seesaw from a single microphone stand. The artist’s voice, singing, is emitted by each in turn. What she is singing are the words from two speeches made, respectively, by Jinnah and Nehru at the time of India and Pakistan’s independence in 1947. The memories of an old political rift are held in equilibrium, into the present. The soundtrack of Shilpa Gupta’s work continues to be heard, like an after-echo, into the installation created by Subodh Gupta (no relation) next door. His work, entitled Date by Date, is the recreation of some imaginary bureaucratic office as it might be experienced within the realms of a bad dream. Abandoned dusty tables serve as the plinths for ancient, rusting typewriters. A mass of papers awaits the attention of an absentee work force. All business has been suspended. “On the Indian highway”, the artist laconically comments, “you drive in four lanes and then you go into one lane and there is a jam or an accident or a demonstration and you are faced with a bottleneck. Our offices are the same.”

There is a lot of humour in this exhibition, although much of it is touched by foreboding or disillusionment. As might be expected, given the strength of modern Indian film-making, some of the most arresting work takes the form of so-called Video Art (a term which would have been superseded long ago if only “DVD Art” had a better ring to it). Kiran Subbiah’s Flight Rehearsals finds the artist endlessly modifying the aerodynamics of a single paper aeroplane – a home experiment with an inevitably sinister cast to it. Bose Krishnamachari’s Ghost/Transmemoir occupies a half-way house between sculpture, video and installation. More than a hundred discarded tiffins – Indian lunch pails – strung up from the ceiling of a small darkened room. The have been disembowelled so that each one can accomodate a small DVD monitor, on which plays a different cacophany of film footage drawn from contemporary life, news, daytime television and the movies. The effect is raucous bordering on overwhelming, rather as if a whole Indian city had been squeezed into a space so small it has the acoustic of a biscuit tin.

The Video Art theme is explored further by a collective of three artists from Delhi who call themselves RAQS. As an acronym, this stands for “Rarely Asked Questions”, while phonetically it describes the mental condition of a whirling dervish. They have been invited to curate what is in effect an exhibition within the exhibition. In their space, a number of films by a number of different artists play simultaneously, each one treating a different aspect of the subcontinent’s landscape (or cityscape). RAQS’s own film, in which two mutually embroiled characters respectively embody “the asker of riddles” and “the guardian of wealth”, is a witty and oblique exploration of modsern India’s supposed economic miracle.

But the most affecting piece in the exhibition is a multi-screen film installation by Amar Kunwar. Known primarily as a maker of straight documentary films, here Kumwar has created a cinematic mosaic full of pathos and the memory of scars that have still barely begun to heal. The Lightning Testimonies was inspired by the appalling – and still relatively little known – story of the more than 75,000 Moslem and Hindu women who were abducted, raped and murdered in the immediate aftermath of the subcontinent’s partition. A seamless blend of modern day footage and archive, moving film and stills, actual testimony and historical texts, it is a truly extraordinary piece of work.

“Indian Highway” is itself an extraordinary exhibition. The experience that it offers is invigorating and harrowing by turns but always rich and rewarding – alive with different sights and sounds and animated by what seems, at times, like a thousand voices all talking at once. As it should be, in fact, it is a little bit like India itself.