New Delhi: Opposing the passage of a federal law by US Senate to ban outsourcing of Government contracts, India today (Jan 28, 2004) said it would take up the matter with American authorities.

"This has come as a surprise... What was being considered a bad policy is now being promoted. We will take up the matter with appropriate US authorities at appropriate occasion," Commerce Minister Arun Jaitley said.

Addressing a FIEO (Federation of Indian Exporters Organisation) meeting after announcing mini-Exim policy, Jaitley said the US legislation would send very wrong signals particularly with regard to multilateral trade talks.

"This sends wrong signals, especially as while market access is advocated for some sectors it is denied in some sectors," Jaitley said.

He said, as a matter of principle the move was wrong. It was not a question of value, as this ban would only impact about two per cent of outsourcing from the country.

Jaitley said he was all the more surprised by this action of the US Senate as it had come despite an assurance by US Trade Representative Robert Zoellick that US federal Government disapproved of the move to ban outsourcing by legislators in some States.