Peers backed an Enterprise and Regulatory Reform Bill amendment to add caste to race discrimination laws. The government opposed the move, saying it had set up an education programme to tackle caste discrimination. But peers said this was not enough, and the law needed to be changed. The government was defeated by 256 to 153.
As the debate took place, more than 400 members of the Dalit community - so-called untouchables - protested outside Parliament.
The Bishop of Oxford Lord Harries of Pentregarth - who introduced the amendment - said the British Dalit community had reached 480,000 and evidence showed they suffered discrimination in education, employment and the provision of public goods and service.
At the moment, the bishop said, there was no means of legal redress for those suffering discrimination. "It would be utterly wrong for us to say to the world that we had the opportunity to protect people from this disgraceful discrimination and we decided not to do it"
"Nothing could be more significant and effective in reducing discrimination on the grounds of caste than to have a clear-cut law that discrimination in the public law would not be tolerated."