The BJP had on Saturday announced the candidature of Jaitley from the seat replacing its sitting MP Navjot Singh Sidhu.
Sidhu, who was offered other seats, had refused, saying he would not contest the Lok Sabha polls at all if not fielded from Amritsar.
Sidhu, a three-term BJP MP from Amritsar, had been at loggerheads with the ruling ally Shiromani Akali Dal in Punjab for some time now.
The Congress on Tuesday declared the candidature of Bajwa from his Gurdaspur seat. There were reports earlier that Bajwa wanted to contest from some other seat. Bajwa had defeated four-time BJP MP and Bollywood actor Vinod Khanna from the seat.
For the Gurdaspur seat, BJP is yet to choose between Khanna and businessman Swaran Salaria.