In the Arthashahstra, Kautilya mentions that Arya have four varnas, these as we all know are Brahmin, Kshatriya, Vaishya and Shudra. But there is something interesting to note, he never says that these are determined by your birth. Kautilya clearly mentions that if someone has Merit than the king should promote him. The idea of Jati (ethnicity) was not even there in the Arthashastra. Fast forward to Shivaji, he was not a Kshatriya, but he did become a king, indicating that there was wiggle room in the Varna system. However when British came to India, they literally correlated the Varna system with their own class system in Europe and worsened the whole practice by solidifying it. Nobody can say that Indian varna system was perfect, it was also discriminatory but the British just made it worse.

Due to their inherent racism, they put all Indians into the boxes of their caste and did not allow them to break out of it. As an example they introduced the Martial races concept, where they said people of only specific Jatis could serve in British Indian Army. They interpreted our Indian texts only through the upper caste Brahmans, who were more than happy to interpret it for their benefit. This worsened the situation for lower Varnas aslower castes were discouraged from intellectual pursuits, which could have improved their situation. Now of-course there are exceptions such as Phule and Ambedkar, who despite being lower caste could study and gain knowledge but they were exceptions.