This article says that SEBI is contemplating introduction of measures to reduce the advantages of High Frequency traders.
“The regulator is also exploring the possibility of order randomization to limit the advantages enjoyed by these entities which have a speed advantage over others. All the orders received within a set period (for example: two seconds) would arrive at the exchange only after randomization, said the second person. Since the period is small, there would be limited impact on non-algorithmic trading players. This will, however, reduce the advantage of speed enjoyed by algorithmic traders since all orders would be intermingled before execution”
HFT has its own positives and negatives. Research has shown that HFT/algo-trading improves liquidity. However there is a increased threat of flash crashes. Google search on the topic gives some of these articles – here and here.
Frankly very less research has been done on HFT in India and needs a more thorough analysis. Any policy implementation without thorough analysis is not going to give desired results.