Why does ethnicity become a salient element of electoral politics in some places but not others? The authors argue that in majoritarian systems, ethnic identity is most salient to electoral behavior when there are high levels of inequality between ethnic groups. They test this argument in the Indian states and find that state-level party system ethnification is strongly correlated with economic inequality between groups, a pattern they also find in cross-national data. They also show that in India, when income differences between groups increase, the groups tend to support different parties. The analysis reveals a strong class component to ethnic politics in India, underscoring the possibility that what scholars often view as identity politics can have an element of class politics in disguise.