Does racism exist?

Long long ago, in a beautiful city of castles, rivers, universities and foreign army camps, there lived a student- alone, struggling to survive in the land of an alien tongue, in quest of her niche in the big bad world of logical abstractions (go figure that out). One day, she surprised herself and another of her loner friends with an Indian meal she packed for lunch. Here's the scene:
Gorgeous sunlight pouring in from the windows. The views outside?
Wisps of white in the azure sky,
Swans fidgeting with pieces of bread in the nearby river,
Students walking with cold coffee and ice creams in their blissfully warm hands,
Two ladies sitting at the table in the pantry;
One of them - an Indian and the other was from eastern part of Europe (never mind the nitty gritty - just need to know that eastern Europeans are somehow not European enough in some people's view).

Enter, the boss.

"Hm.. the whole pantry smells spicy!"

(Me..Gloating inside!..)

"Hey....don’t eat the rice, you will turn brown you know?!"

(Me...Still giggling. in sheer shock)

Aeons later, when I think of this scene, I still smart. Not that I feel humiliated or feel the need to have got back to him with an appropriate answer at that point. No it is not about not having retaliated. It is about the paradigm that still holds true. You can say whatever you want to the Indians. They won’t make a fuss about it.

When I read the controversy about an Indian "racially abusing" someone, I must say I was laughing. Not to say that Indians are not "race conscious" - how many of us know our compatriots who would bend backwards to appease those of the fairer skin? But please, give us a break will you? We can’t think of racism sir (we do think a whole lot of other things though)- after all, we Indians come in all kinds of shapes, sizes and colors.

Oh, and you can’t say everything you want to an Indian. Not anymore.