"We regard this as a highly unfortunate development. These restrictions interfere with the free flow of trade, technology and finance and have an adverse impact on mutually beneficial business interaction," an external affairs ministry spokesman said here. He said Washington's decision reflects the "continuation of a coercive approach that is entirely misplaced and counter-productive. Such steps are unhelpful for meaningful discussions towards an improvement in bilateral relations which is desired by both countries."

The entities list comes barely a week ahead of the crucial Indo-US talks between prime minister's special emissary Jaswant Singh and deputy secretary of state Strobe Talbott in Rome on November 19.