when you think of it, N. Indian **are **the most racist of all Indians. and not only towards S. Indians but towards North-Eastern Indians too. you are most likely to be called a 'chinky' or asked 'whats your rate(if you'r a gal)?' if you are a NE Indian and in somewhere in Delhi than if you'r somewhere in B'lore.
I think you are confusing racism with racial stereotyping. One can stereotype a person based on typical characteristics exhibited by that group/race, but still not discriminate based on that.
Where it becomes racism is when one starts discriminating against a particular group/race based on those stereotypes.