New Delhi: India has categorically told US that attempts by some American states to ban outsourcing has evoked adverse political and public reaction in New Delhi even as Washington assured that the Federal government was opposed to such moves.

"Such moves were vitiating the environment as it is tantamount 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 Federal government thought it was a "bad policy" and was opposed to such legislations and was trying to resist them.

Five US states including New Jersey have proposed such legislations and following pressure from India and US domestic industry struck out an important clause which makes it mandatory for a call centre to divert all the data to a local call centre making the operations very costly and unviable.

Through outsourcing US industry had saved about $ 12 billion last year 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 and cited the example of luxury tax in which the Indian government prevailed upon states not to do so as it was against international commitments.

PTI