Stung by the US action of passing a law to ban outsourcing of government contracts to overseas companies, including those in India, IT Minister Arun Shourie said the move was against the spirit of global trade and this was not the way Washington could advance in the backdrop of multilateral trade negotiations.

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"I feel this would worsen prospects of multilateral negotiations in trade," Shourie told PTI from Davos while advising the Indian companies to diversify their markets.

Clarifying that India's exposure to US government jobs was minimal, Shourie said, "The direct effect would be little and Indian IT companies must learn some lessons from such moves."

"We must continue to move up the value chain and evolve such solutions and services, which are good and cost-effective and Indian IT companies must diversify to other markets," he added.

Giving an example of diversification, he said the German IT market is $66 billion in size and India's trade with them is just $250 million.