India’s retail trading ecosystem is undergoing another major transformation. From the days of trading floors and dealer-operated terminals to web and mobile platforms, technology has consistently lowered the barriers to market participation. Now, the next shift is underway: AI-powered algorithmic trading, which was once largely restricted to institutions and sophisticated traders, is increasingly becoming accessible to retail investors.
The combination of SEBI’s February 2025 framework, trading APIs, zero-code platforms and AI-driven strategy builders is opening up a new avenue for traders who may have little or no coding expertise. But the bigger appeal could lie beyond speed and convenience—automation can help traders remove the fear, greed and execution bias that often creep into manual trading.
As India’s retail investor base and derivatives participation continue to expand, could algo trading become the next mainstream evolution in how Indians trade?
In an interaction with Kshitij Anand of ETMarkets, Shruti Jain, Chief Strategy Officer, Arihant Capital Markets Ltd, explains why the transition from manual execution to AI-led automation is gaining momentum, what is driving retail adoption, and why the next generation of traders may embrace algos before they ever learn to trade manually. Edited Excerpts –
Q) For decades, algorithmic trading was largely the domain of institutions and sophisticated traders. Why is this suddenly becoming accessible—and attractive—to the Indian retail trader?
A) Three important things converged that made algo trading not just a tool for large institutions and professional traders but is now accessible to retail investors too.
The biggest turning point was SEBI's 4 February 2025 framework, which formally opened algorithmic trading for retail investors in a regulated manner.
Second was technology. For years, the barrier wasn't just knowledge, it was infrastructure. What needed a Bloomberg terminal, a quant team and coding skills until a few years ago now runs on an API and a smartphone.
Brokers and trading platforms like ArihantPlus democratized access by opening up trading APIs and zero-code tools directly to retail clients. You can now easily automate strategies with zero coding skills with just an AI prompt, with the same discipline that was once available only to institutions.
Q) Retail participation in derivatives has exploded over the last few years. Is AI and automation emerging because traders are becoming more sophisticated—or because manual trading is simply becoming too difficult?
A) Change has been the only constant in how India trades. Until the 1990s trading was done on the floor, then came dealer operated terminals, followed by direct terminal access for retail clients in the early 2000s.
Soon after, web and mobile platforms that put trading in everyone's pocket. What we're seeing now is simply the next link in that same chain - the shift from manual to automation through AI and algos.
Also, markets have gotten faster and noisier. A profitable setup can disappear in seconds, and no human can watch five charts and keep emotions out of the equation.
Automation isn't retail traders becoming institutional overnight; it's them recognizing that manual execution has an inherent lag and bias that machines don't.
Q) What is the biggest pain point that AI and automation are solving for a retail trader—lack of time, lack of discipline, lack of data analysis or emotional decision-making?
A) Emotion, without question, the others are downstream of it. A trader can find time, learn data analysis, even build discipline through habit.
But the moment real money is on the line, fear and greed override every rule they set for themselves. Automation's real value isn't intelligence, it's that it doesn't get influenced by emotions. It sticks to the rules without bias!
Q) How large is the AI and algorithmic trading opportunity in India today, particularly on the retail side? Are we talking about a niche community of sophisticated traders or the beginning of a potentially massive new industry?
A) India has over 22.5 crore demat accounts as of the end of FY2026 (Sebi) and one of the highest derivatives trading volumes globally. Now, that's a massive base for algo adoption to build on. Earlier trading in algos required coding skills.
Now on platforms like ArihantPlus, we offer ready-made algos, zero-coding algo strategy builder where you can build your own algo strategy with just an AI prompt or using a rule-based form.
That shift alone can take this from a sophisticated few to a mainstream retail habit within the next few years.
However, right now, adoption is still nascent and concentrated at the top - it's largely educated, well-informed traders and larger, more sophisticated participants who've built algo and automation into their strategies so far.
We're also seeing curiosity turn into adoption at the other end of the spectrum too - a new generation of young, first-time traders entering the markets who are comfortable going straight to algo-based tools rather than learning to trade manually first. That's a strong signal of where this is headed.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
