New Delhi has categorically told the United States that attempts by some American states to ban outsourcing has evoked adverse political and public reaction in India.
Washington has assured India that the US government was opposed to any such ban.
"Such moves were vitiating the environment as they amounted to denying market access in an area in which India has core competence and bringing in such legislations interferes with market forces," Commerce and Industry Minister Arun Jaitley told reporters in New Delhi after his recent visit to US.
Jaitley, however, said US Trade Representative Robert Zoellick had categorically told him that even though states were doing this, the US thought it was a 'bad policy' and was opposed to such legislations and was trying to resist them.
Five US states have proposed such legislations. The US industry saved about $12 billion last year through outsourcing, taking advantage of cheaper services in countries like India.
India discounted the US argument that it was a state subject and therefore could do very little.