What should I keep in mind before starting a proprietary trading company in India?

Even if you are a retail investor, this will save you a lot of money in the long run.

Move to Andhra Pradesh. I guess you want to trade intraday derivatives because that’s what everyone does. My colleague and quant trader Kumar, has been testing driven day trading algorithm in our prop book. He deployed Rs 6 lakhs through a Zerodha account and this is the result after a month. He made a profit of Rs 79,085 but stamp duty turned out to be Rs 12339, that's around 15% of profits.

This happened because we’re housed in Karnataka and stamp duty here is an atrocious 0.003% of the contract value without any ceiling limit.

Which means if we buy a futures contract of SunTV when it trading at 870, the contract value is 870 * 1000 (lot size) = Rs 8.70 lakhs. When we sell at 872, the contract value now is Rs 8.72 lakhs, a sum total of = 17.42 lakhs.

0.003% of 17.42 lakhs = Rs 522.6. That’s around 25% of our profits on this trade.

It’s not just Karnataka, almost every state will kill you. State wise stamp duty rates for derivatives: https://bit.ly/2yWu3mK

In Andhra Pradesh, although the stamp duty as a % is higher at 0.005% of contract value, there’s a cap at Rs 50 rupee per lot. Your Rs 522 stamp duty bill just fell by 90%

We’re spinning off our proprietary trading arm to a separate entity which will be based out of Andhra Pradesh. You should do. Enjoy the biriyani and the landscape!