It's questionable wether the caste system is "racist", since caste is something that is (mostly) independent of race. Nevertheless, both caste and race are things you're born into, and discriminating on the basis of either is wrong.
As for racism itself, Indians have consider dark skin to be ugly and fair skin to be beautiful. This is racist.
Also, in my experience in America, there are two kinds of desis when it comes to racism. The first kind is progressive relative to other Americans, and thus more anti-racist. The second kind wants to look up to whites and look down on blacks, and are more racist than white Americans. I think it's these racist Indians that get us the title of "model minority", because they are willing to fit into the racial hierarchy.
