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Prince Philip, the Duke of Edinburgh, has been the chancellor since 1976 and is due to retire from the post at the end of June.
Voting for the constitutional head of the 802-year-old university will take place on 14 and 15 October.
Arain, 46, was born in Kenya and has family roots in Jalandhar, where his father was born.
Arain told PTI: "I have received lots support from Indian academics and students at Cambridge, besides senior members of the Senate. Lot of people in Cambridge know me, and know what I stand for. I have support from both, the town and the gown."
Arain has received "well in excess" of the required 50 nominations that enable him to contest the election.
The other three candidates are Lord Sainsbury (the official candidate), actor Brian Blessed and high-profile barrister Michael Mansfield.
If Arain is elected in October, he will become the 108th chancellor of the university since Hugh de Hottun was first elected to the post in 1246.
The principal public role of the office is the conferment of Honorary Degrees at an impressive annual ceremony.
