In another step against outsourcing from the United States which could affect India, Democratic Senator Christopher Dodd has introduced a legislation to ban the use of federal funds to buy goods and services produced by overseas workers.

The bill would bar the Federal government from buying goods or services that are produced directly by overseas workers or by domestic companies using foreign subcontractors.

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Federal privatisation efforts and state programmes using federal funding would also be limited.

Dodd said on Wednesday that the legislation aimed to 'protect American jobs.'

"Workers in Connecticut and across the nation are first-rate. It simply doesn't make sense to export their jobs and futures halfway around the world to save a few pennies. This legislation is a step toward stopping the needless export of American workplaces," Dodd said.

Several legislations against outsourcing have already been introduced in the US Senate and states.