Colonialism brought about major and fundamental changes in the institution of caste. Some scholars argue that what we know today as caste is more a product of colonialism than of ancient Indian tradition. These changes were often a result of the rapid spread of capitalism and modernity.

Initially, British administrators tried to understand the complexities of caste to govern the country efficiently. This led to methodical surveys and reports on the 'customs and manners' of various tribes and castes. Many British administrative officials acted as amateur ethnologists to pursue these studies.

Economic changes also had a significant impact. Modern industry created new jobs for which there were no caste rules. Urbanisation and the conditions of collective living in cities made it difficult for caste-segregated patterns of social interaction to survive.

At an ideological level, modern educated Indians attracted to liberal ideas of individualism and meritocracy began to abandon extreme caste practices. However, caste proved to be resilient, as recruitment to industrial jobs often continued to be organised along caste and kinship-based lines.