New Delhi, March 31 -- India's retail brokers are bracing for a sharp erosion in active clients and revenue as the escalating West Asia war threatens to further dampen market sentiment and trading activity.

The active retail client base of brokerages has already shrunk over the past year due to muted, rangebound markets and the impact of regulatory curbs on derivatives trading. The outflow of active clients is set to intensify from March as the US-Iran war increases the risk of more retail investors stepping away from the stock market.

"Broker revenues are down 20-30% across the industry year on year. Recovery will depend on net client additions-how many customers are acquired relative to those becoming inactive. If acquisition does not...