I hear a lot of instances of favoritism or nepotism in what you describe, possibly even corruption, but not much sounds like caste-based discrimination. "Incompetent person hires a lot of people they know instead of qualified candidates" is not really what's being discussed here, and I think Ms. Soundararajan would agree.
As a side note, this illustrates quite neatly why most of us who come from India are somewhat reluctant to talk about caste and explain how typical discrimination takes place, because Americans will try to slot it into their preconceived notions about class or race-based discrimination, and tend to jump to conclusions like you're doing here, complete with an "I have nothing against Indian people" disclaimer at the end (Really?).
So, a reasonable question is, "Well, what does a real instance of caste-based discrimination look like?"
Imagine that among a bunch of Indian candidates, an Indian hiring manager hires only Indian people who order vegetarian meals at lunch, and rejects any Indian candidate who orders a dish containing meat. Also, suppose you see this happening pretty frequently, and the manager inexplicably rejected some pretty great candidates, and the only common factor is that they ordered meat at lunch. Then it might be caste discrimination! (please please please note the operative word might, I really don't want to start a witch hunt here)
But something like that sounds pretty weird and far-fetched to most Americans, so it's hard to communicate what it looks like, let alone explain the somewhat complicated backing reasons.