The contemporary Indian English novel has emerged as a significant medium for expressing the enduring effects of trauma caused by caste discrimination, sexual harassment, forced migration, family disputes, community memories and the post-colonial legacy of society. The present study explores the connection among trauma, memory and identity with respect to Arundhati Roy’s The God of Small Things and her portrayal of the long-term impact of childhood trauma, caste, gender, family dynamics and marginalization. Using Cathy Caruth’s idea of deferred trauma, Dominick LaCapra's differentiation between acting out and working through, Marianne Hirsch's idea of post-memory and post-colonial trauma studies, this study explores how the survival of traumatic experience depends upon memory, silence, recurrence and/or fragmentation of narrative. It suggests that, in the Indian context, trauma cannot always be viewed as one traumatic event that occurred once. Instead, trauma can be produced continuously by ongoing structural inequalities (e.g., caste), patriarchal systems, exclusion, and historically violent traditions. Memory therefore serves both to perpetuate suffering by repeatedly returning to unresolved experiences, and to provide opportunities for witnessing/testifying, resisting and rebuilding. Contemporary Indian English Fiction uses narrative fragmentation as a major formal method to represent the unstable nature of traumatic consciousness. This paper concludes that the construction of identity in contemporary Indian English fiction is not stable and cannot be fully recovered from the effects of trauma; instead it is constantly being re-constructed by personal memories, social histories and cultural experiences.