This paper studies the extent of teacher’s in-group bias in occupational expectations and grading on basis of student’s caste and socioeconomic status. The paper adopts an experimental approach and draws on data generated from 122 teachers from 19 schools in Delhi, India. Student’s caste and socio-economic status were randomly assigned to a set of essays written by students such that the assigned characteristics were not related to essay quality. The results show that high caste teachers hold higher occupational expectations from their in-group category and biased against low caste category. For instance, high caste teachers assign 0.53% or 0.019 points higher occupational expectations to high caste students and assign 5.6% or 0.19 points lower occupational expectations to low caste students. The magnitude of coefficients is small but significant at 5% level (P value<0.005). In terms of marks assigned, results show, that high caste teachers assign 2.36 points or 3.22% higher marks when the assigned characteristics belong to high caste; indicating in- group bias/favour for the same caste. The coefficient is positive and significant at 5% level (P- value < 0.05). In contrast, high caste teachers are shown to be biased against low caste students as they assign 2.41 points or 3.41% lower marks when the assigned characteristics is low caste. Given the ultra-competitive nature of schooling in India and the importance of grades in determining access to higher education in India, even a point disadvantage is substantial.