"Outsourcing makes businesses more competitive, increasing their exports and their profits," Mr Vajpayee argued.
Mr Vajpayee's comments are the latest contribution to a global debate on outsourcing, which many in developed economies blame for destroying jobs.
India, with low costs and high-quality skills, has benefited from the trend. 'Natural consequence'
Western companies have already recruited some 170,000 workers in India to fill jobs such as telemarketing and customer support, and that figure is forecast to reach 1.1 million by 2008.
Mr Vajpayee is keen to prevent US lawmakers following up on their promise to limit the practice.
The US Senate has passed a bill to impose curbs on federally-funded outsourcing, and contenders for the Democrat presidential nomination have echoed their concerns.
Developing countries insist that America must live by its creed of free trade, and allow jobs to move wherever is most efficient.
"The very process of liberalisation, on which we have been lectured for so many years, has created competitive skills which are available for utilisation by business everywhere," Mr Vajpayee said.
"Outsourcing is a natural consequence of this process." BBC News