I'll mostly be drawing from Gavin Cawthra's Brutal Force: Apartheid War Machine for this answer. The situation of Indians during Apartheid can best be described as being "privileged second class citizens". As the National Party, and the Apartheid government as a whole were explicitly white, and Afrikaner supremacist, Indians were never viewed as being on the same level as whites, however, they were viewed as being above the "bantu" (read black), populations.

This "privileged" status ultimately led to Indians receiving the right to vote in the 1983 Constitution, which reformed the Parliament into a tricameral system. Therefore while Indians could vote, they could only vote for representatives in the house of delegates, which was reserved for Indians. Yet this right to vote was rightfully seen by many in the South African-Indian community as a sham, as the newly reformed parliament was far weaker, as the new constitution continued the trend of gradually vesting more and more power into the President and the National Security Council.

Indians were also targeted for recruitment into the South African Military, especially into the Navy, as the Indian populations in South Africa are (or at least were) concentrated in the Natal region, especially around Durban and Port Elizabeth. In 1975, the South African military established the SA Indian Training Battalion, which was later renamed SAS Jalsena 1979, whose purpose was to train South African-Indians for military service. Similarly to many Coloured members of the South African military, a token number of Indians received junior officer commissions. However, the vast majority were largely relegated to support positions, as can be seen in a 1986 South African Military Journal Article, which stated

"The present scope of employment for Indian Servicemen in the Permanent Force includes inter alia gunners (Navy), policemen (dog handlers), stewards, chefs, drivers, clerks, divers, hydrographic surveyors, and shipwrights."

Acting based on its "Total Onslaught doctrine", the South African government sought to shore up its position by "buying" the loyalty of other minorities in the country. Yet, the due to its Afrikaner Nationalist nature, the government did not want to do anything that would too drastically alter the racial hierarchy of South Africa. In fact, opposition to the 1983 Constitution, which in effect created a dummy parliament for Indians and Coloured populations, was such that the once formidable National Party splintered, with the
Conservative Party forming to represent the rightmost wing of the National Party.