The roots of the contemporary Indian diaspora can be traced to the colonial domination by the British and the exploitation of cheap indentured labour from the Asian sub-continent in different parts of the colonial empire. In spite of such humble beginnings Indians in the diaspora have prospered to the extent that they have generated envy, tension and conflict in their adopted countries. The South African experience has been no different, where for almost a century people of Indian origin were considered as aliens in the land of their birth. This paper analyses some of the opportunities, challenges and conflicts facing people of Indian origin in South Africa in the post-apartheid era. Traditionally, South African Indians have been viewed as a homogeneous community, and presented a united front in opposing apartheid. However, the democratic era has witnessed the resurgence of ethnic and sub-ethnic identities (class, language, religion, geographic origins). While those in the business and professional sectors thrived in the post-apartheid era, working class Indians increasingly feel disillusioned, marginalised and excluded from the rainbow nation. Many believed that they were being sidelined in affirmative action and black economic empowerment schemes. There has also been an alarming increase in psycho-social problems. Largely as a result of a lack of astute leadership Indians face the possibility of being politically marginalised in the post-apartheid era.