External Affairs Minister Yashwant Sinha on Monday night termed as 'retaliation' the US contention that restrictions would be imposed if it does not open up its markets.

"It smacks of retaliation that if you (India) don't open up, we (the US) are going to impose restrictions. That is not the way to go about it," Sinha told reporters in Delhi.

He was asked about the United States seeking a commitment from India to open up its markets for ensuring that trade is a two-way street in the wake of the recent controversy over outsourcing.

"The US has to realise that by outsourcing, the companies manage to remain competitive. So, it saves some jobs. If they don't outsource, they risk becoming not competitive," he said. "This is where they have to realise their own interest."

Sinha said American business is realising this and that is why they were against US laws, including the recent one restricting government outsourcing to contractors who will do the work in the US itself, thereby excluding India and other countries from getting sub-contracts.

US Charge d'Affaires Robert Blake earlier told reporters that Washington sought 'greater balance and greater liberalisation' on India's part to ensure that US investors have as many opportunities here as Indians have in that country.

The US believed that free trade and open market brought benefits to all countries that commit to them. "But the commitment to and benefits of trade must be reciprocal. To succeed, trade must be a two-way street," he said.

"For the last ten years, we have been liberalising and as a result of this, there have been job losses in India," he said.

The minister said during his meetings with US Congressmen and Senators in Washington recently, he had told them that as a politician, he understood their pain. "We have gone through it ourselves."

In an obvious reference to the US move on outsourcing, it was conveyed that this was no way to go about 'because you will end up doing more damage to your economy'.

"Why haven't they done it in the manufacturing sector? Has anyone calculated job losses as a result of manufacturing shifting from the US to other countries?" he said.

He said while American businessmen 'are on our side' on the issue of outsourcing, the politicians viewed it differently -- this being an election year in that country.

Sinha said India has taken up the issue 'directly' with the Bush administration.

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