I think you're struggling to detach Jason Bateman from his character here.
The character he is playing is purposefully a horrible, mean-spirited and rude man who is attempting to ruin a whole nationwide tournament because of some long-running gripe with his father's absence. He's MEANT to be horrible.
I really don't think there's any credence to the 'if the child was black or gay' argument because the film would have played the same.
It's NOT okay to be racist to Indians. It categorically isn't.
But that's the joke. It's hearing the taboo, or seeing someone act in an outlandish way that you'd find shocking or crazy in real life.
Sure, if you heard someone on the street say this it wouldn't be funny, but in the context of the film I think it works perfectly. Of course, all humour is subjective and its OK if you didn't find this funny at all, but if the reason you didn't find it funny was because you thought it was racist then I think you've taken the comment at face value rather than looking at it as a tool for the film to convey just how ridiculous Jason Bateman's character is.
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