You are right.

I cringe every time I speak with Indians and their use of racial slurs. Caste System is based on race, lighter skins higher castes, and dark skin lower castes. Caste or "varna" in Sanskrit means skin colour.

The Indians think they are more beautiful thus superior to East Asians who they call "chapta" or "flats" because of their not so deep faces.  No other neighbour - not Russia, not Pakistan, not Iran think of Chinese as ugly or inferior. The Chinese are well liked and respected in all Asia except India. 

This Indian arrogance will not serve them well. They were defeated once because  of underestimating their foes, and this will happen again. Racial superiority never works.