India said on Thursday it will formally raise its concern with the United States over a ban imposed by the US state of Ohio on offshore outsourcing at a high-level meeting in Washington.
Ohio state has banned outsourcing of government information technology and back-office projects to locations such as India.
"It will be on the agenda. I will raise the issue at the TPF (Trade Policy Forum) meeting there, definitely," Commerce and Industry Minister Anand Sharma told reporters in New Delhi.
Sharma and US Trade Representative Ron Kirk will co-chair the September 21 meeting of the Trade Policy Forum, which is the principal forum for trade dialogue between the United States and India.
Indian officials said, however, while expressing "disappointment," India does not want to adopt a "confrontationist" stance ahead of US President Barack Obama's visit to India in November, the Press Trust of India reported.
Meanwhile, the National Association of Software and Services Companies (NASSCOM), said the move was "discrimination" and added it was imperative that the "focus on free trade remains strong."
However, the group, which represents India's top software exporters, said the ban would have little impact on Indian business as "the (US) public sector represents a small fraction in the overall demand for offshored services."
It also said the decision reflected election rhetoric ahead of US mid-term elections in November with domestic unemployment nearing 10 per cent and warned, "More such electoral rhetoric can be expected in the next few months."
Ohio Governor Ted Strickland issued an executive order prohibiting the spending of public funds for services provided offshore, saying that sending work abroad "deprives Ohioans and other Americans of employment opportunities."
NASSCOM said it would lead a delegation to the United States later this month and would "be taking this up with relevant officials."
The Ohio action comes on top of a US law passed last month tightening security at the Mexico border with measures paid for by steep hikes in fees for work visas.
Over half of the world's top 500 firms outsource work to India, which has become the world's back office where companies have set up call centres and number-crunching and software development outlets to cut costs.
India's second-largest outsourcing company, Infosys, said it was concerned about the ban, noting it came ahead of the mid-term polls.
"The Democrats need to demonstrate to people that they are doing everything they can to fix unemployment," Mohan Pai, an Infosys director told Indian network NDTV.
"But there is the fear of it (anti-outsourcing sentiment) spreading, which is worrying," he said.