This is one more fallout of 9-11, says an official at the Indian Embassy in Washington DC, and there is more to come. The Indian Embassy has been informed that during the course of this year as many as 25,000 Indian passport holders may be asked to return home by US immigration authorities on grounds of overstaying their visa or to alter their visa status or simply because they no longer have the job that brought them here in the first place as H1-B visa holders.
Indian Americans are still hopeful that they can get the Bush Administration to take a re-look at the 30-day order but Indian diplomats are less sanguine. The dim outlook of some Indian diplomats here is partly a reflection of the fact that Indo-US relations have hit a plateau and if the cooperation on the security front is set aside, there isnt much else happening.
On the political and security side much has happened and there is now a certain stability and depth to that relationship. This is best reflected in the fact that both countries have shied away from making a big deal about increased maritime security cooperation with Indian naval vessels invited to escort US ships between the Persian Gulf and the Malacca Straits. This decision on the part of the Bush Administration has sent an important signal across the world that India will play the key-role in the security of the sea lanes in the Arabian Sea and the Bay of Bengal spanning the region from Aden to Singapore - British Indias sphere of management.
There is similar good news about increased defence cooperation even if the US government has not lifted all hi-tech sanctions. In the fight against terrorism there is quite cooperation going on. But thats about it. This high level of engagement on the security side is not being matched by a similar engagement on the economic policy front. There isnt enough happening on the economic front and thats not good. India must do more on the trade front. says James Clad, an old India enthusiast who has just joined the Bush Administration.
The reference on trade is perhaps to two separate things that worry Americans. First, the low rate of growth of US exports to India in recent months, and second, the cold war following the open spat between Indian commerce minister Murasoli Maran and the US Trade Representative Robert Zoellick at Doha. Many do-gooders have been trying to get Mr Maran and Mr Zoellick to just talk to each other, forget getting them to agree with each other, and thats not happening.
Notwithstanding the domestic problems faced by that five-letter word Enron, it remains a bone of contention with India. There will be no US investment in the Indian power sector for the next five years says an Indian official at a multilateral agency. If US investment in Indian infrastructure is drying up and if there is little interest in manufacturing at a time when domestic investment in India is still to pick up, the only area of any likely action is services.
The services sector can do for Indo-US economic relations what manufacturing did for US-China trade says Devesh Kapur of Harvard University. Indeed, that is the only sector in which there is action, despite the tech slow down. However, here too the greater action will be in data processing and out-sourcing of software development, with the work being created in India. The huge inflow of temporary workers into the US is going to dry up with the US clamping down on immigration. This means India will have to improve its domestic infrastructure, especially telecom and power and generate adequate manpower, competing with Israel, Philippines and other East and Southeast Asian countries.
All this is in the future. Right now the level of activity in the services sector, including the IT sector, is not providing enough of an economic ballast to a still nascent strategic relationship. The cooperation on the security front can not by itself sustain the bilateral relationship or take it to the level of the current engagement between China and the US. More to the point, if a Democratic party administration comes to power some of the old nuclear non-proliferation obsessions can easily come to the fore re-introducing rancour into the strategic discourse.
If and when that happens there must be enough of an economic ballast to counter any such resurgence of political dissonance. Indeed, while the nuclear issue is not on the Bush governments agenda, there is already rising anxiety about increasing communal tension within India and the slow pace of progress on a resolution of the Kashmir issue. While the pro-Israel Jewish lobby can help upto a point in deflecting criticism on the communal situation in India, even this lobby would like to see more business opportunities in India and there has to be a commercial quid to the political quo.
That brings business and economics back into focus in the bilateral relationship. American interlocutors do not have the patience to listen to explanations about how the reason for such a low level of economic engagement has nothing to do with any anti-US bias but is the product of Indias economic slowdown. At a time when China is still clocking upwards of 7 per cent growth and East and Southeast Asia are getting back on track, few have the patience to wait for India to get its act together. If we remain obsessed with our domestic political and communal politics, and continue to neglect the economy, the world and the US will move on leaving us to deal with our own devices and desires. So who cares!