"Mildly offensive" seems strange to me. As if the very Mention the existence of prejudice or skin colour must be offensive."
"Mildly offensive" doesn't seem at all strange to me in this context. These lyrics made me cringe:
"Her loveliness and Eastern dress placed others in the shade But never yet did I regret the choice of this dark maid"
and the chorus too.
I imagine it was written a long time ago. I can understand how a songwriter who enjoyed writing in the folk idiom - using tropes and models and stock phrases of English folk like "fair young maid" etc – would write lyrics like that. I can imagine that, back in say the 1970s, a song singing of love across a very real divide of racial prejudice would go down well to an audience of white liberals, and might have even riled some of the more conservative audience members. It might even have been welcomed by a Punjabi listener in an era when the black and white minstrel show was still being screened. You can see that it's well meaning.
But the song itself objectifies and fetishizes the "otherness" of this girl in a way that's inexcusable in the much more racially integrated 21st century. It's pretty creepy, frankly. It's racist in the sense that it is objectifying the face and appearance of the beloved, but not as an individual - the way classic love poetry has ever since Petrarch or Shakespeare's sonnets – but as a racial type.
Like Gibb Sahib, I wouldn't use the word "offensive". I think that's a bit of a red herring most of the time it's used. Can't remember the last time I felt actually personally offended by something like this. (And I imagine even if I were a punjabi girl, I'd probably find this rather more embarassing than offensive, a relic of a bygone age) No, the charitable word for this song would be "clumsy".
This song reminds me a little of Frank Zappa's "Jewish Princess", only Frank Zappa was massively taking the piss out of this sort of objectification (and still failing somewhat: "Jewish Princess" still ends up being pretty racist). This song seems to be entirely earnest.