Opponents of the bill welcomed Newsom's action and said the veto averted a stigmatization of an entire minority - the South Asian and Hindu communities - as being discriminatory.
The bill itself, as well as the buildup to its passage by state lawmakers and to its veto, saw intense debate on the issue in California and beyond.
Angana Chatterji, a scholar at the University of California, Berkeley, said that caste discrimination has a "pernicious hold" that impacts South Asian communities in the United States and that the California bill "recognized the basic and fundamental right to equality for all who are targets of casteism."
Activists who supported the bill had launched a hunger strike in early September in a push for it to be signed into law.
In vetoing the bill, officially called Senate Bill 403 or SB 403, Newsom cited existing laws that already prohibit ancestry discrimination, which he said made the bill "unnecessary."
Advocacy group Hindu American Foundation, which opposed the bill, agreed with Newsom and hailed the veto as a major win.
"Any discrimination on the basis of 'caste' violates not only Hindu teachings, but also existing state and federal law. The fight over SB-403 has always been about the best solution for any intra-community discrimination, not whether such protections are needed," said Hindu American Foundation Executive Director Suhag Shukla.
U.S. discrimination laws ban ancestry discrimination but do not explicitly mention a ban on casteism. California's bill targeted the caste system in South Asian and Hindu immigrant communities by adding caste as a protected class to the state's existing anti-discrimination laws.
The caste system is among the world's oldest forms of rigid social stratification. It dates back thousands of years and allows many privileges to upper castes but represses lower castes. The Dalit community is on the lowest rung of the Hindu caste system and members have been treated as "untouchables." India outlawed caste discrimination over 70 years ago.
Opponents of caste discrimination say it is no different from other forms of discrimination like racism and hence should be outlawed.
"I grew up in Orange County, where I was bullied for my caste throughout my education," said Thenmozhi Soundararajan, executive director of California-based Dalit civil rights organization Equality Labs.
"Caste-oppressed Californians are here, and we deserve workplaces and schools free from discrimination and violence," Soundararajan said in her testimony in April in support of the bill.
Equality Labs said "it is heartbreaking to receive the governor's veto."
The Indian diaspora is comprised of about 4.9 million U.S. residents who were either born in India or reported Indian ancestry or origin, the Migration Policy Institute said late last year. About a million of those reside in California.
The bill was backed by multiple human rights groups like the American Civil Liberties Union (ACLU), Amnesty International and MeToo International.
Opponents of the bill said that since U.S. laws already ban ancestry discrimination, this legislation becomes meaningless and stigmatizes the entire Hindu and South Asian communities with a broad brush.
The bill's original version was revised after some opposition. The revised version listed caste under "ancestry" and not as a separate category. It was passed by California's state Assembly in late August and by the state Senate in early September with a near unanimous vote.
"Creating an entire separate category and law that only applies to minority communities is inconsistent with our constitutional norms," said Samir Kalra, managing director at Hindu American Foundation.
The bill defined caste as "an individual's perceived position in a system of social stratification on the basis of inherited status."
(Reporting by Kanishka Singh in Washington; Editing by Mary Milliken, Grant McCool and Mark Porter)
By Kanishka Singh
