Algorithmic Trading in India: An Analytical Study of Market Growth, AI Integration, and Future Prospects

Abstract ―​

Algorithmic trading is transforming the way financial markets are traded, allowing traders to make decisions based on data and execute trades in an automated and high-speed manner. This shift is picking up pace in India with the advancement of technology, growing market engagement, and supportive regulations. The objective of this study is to understand the present market size of algorithmic trading in India, analyze the growth trends, study market segmentation based on the components, deployment models and trader types and identify the key drivers and challenges affecting the market growth. The research has been done based on the secondary data and analytical techniques like the trend analysis, CAGR estimation & comparative analysis have been used. The findings show that the algorithmic trading market in India is witnessing a strong growth trend, fueled by the adoption of artificial intelligence, cloud computing, and a surge of interest among institutional and retail investors. The market has good growth potential and will continue to grow significantly in future. But hurdles like regulatory complexity, cybersecurity threats, and infrastructure constraints still remain. The findings from the analysis emphasize India's shift towards an advanced, technology-driven trading environment and its increasing significance in the global algorithmic trading arena.