MUMBAI/NEW DELHI - Indian shopkeepers and traders affiliated to a local lobby groupheld scattered sit-in protests across the country on Monday against Walmart Inc's proposed $16 billion acquisition of e-commerce firm Flipkart.

The Confederation of All India Traders (CAIT) had hoped to gather one million protesters at various cities in the country to voice opposition to the deal, but the numbers were far fewer, witnesses.

"This is the first phase of our protest. And if the government doesn't listen, we will decide our future course of action at our national convention in Delhi later this month," Praveen Khandelwal, the CAIT secretary general told Reuters.

The group says the U.S. retail giant's buyout of Bengaluru-based Flipkart will create a monopoly in the retail market and drive mom-and-pop stores out of business. India currently allows 100 percent foreign direct investment in e-commerce firms that operate on an online marketplace-based model.

The sit-in in Delhi, where CAIT is based, attracted just about 50 traders and shopkeepers by noon, according to a Reuters witness. Attendance in other cities was also sparse.

Satinder Wadhwa, a watch seller who attended the Delhi demonstration, said a cash-rich Flipkartwill be a major threat to small businesses like his own, which were already suffering due to a ban on high-value currency notes in Dec. 2016 as well as a nationwide sales tax that was introduced a year ago.

In Guwahati, one of the main cities in the northeastern Assam state, about 300 traders gathered to protest against the Walmart-Flipkart deal, said Rupam Goswami, vice president of CAIT. They also demanded simplification of the nationwide sales tax, he added.

Small sit-in protests were also held in different districts of India's eastern West Bengal state.

The CAIT in a statement, however, maintained that a million traders had participated in the demonstrations.

Bentonville, Arkansas-headquartered Walmart announced in May that it was acquiring roughly 77 percent of Flipkart, a deal that now awaits the approval of India's anti-trust regulator.

Multiple sources and lawyers close to the deal have previously told Reuters that while the Competition Commission of India will consider all arguments, the CAIT did not pose a challenge to the acquisition.

Walmart, which currently runs 21 cash-and-carry stores in India, said on Monday it had been supporting local manufacturing in India by sourcing from small and medium suppliers, farmers and businesses run by women.

"Our partnership with Flipkart will provide thousands of local suppliers and manufacturers access to consumers through the marketplace model," Rajneesh Kumar, senior vice president, Walmart India, said in a statement.

(Reporting by Sankalp Phartiyal and Sai Sachin Ravikumar; Additional reporting by Subrata Nag Choudhury; Editing by Muralikumar Anantharaman and Louise Heavens)

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