Two powerful US Senators have announced they will introduce a legislation which, if passed by the Congress, would give preference to foreigners studying in American universities, a move that will tighten the noose around the H1B visa programme and could hurt Indian IT firms.

The bill – to be introduced by Senator Chuck Grassley and Dick Durban – will require US Citizenship and Immigration Services to prioritise for the first time annual allocation of H1B visas. It will ensure the "best and brightest" students being educated in the US receive preference for an H1B visa, a statement issued by the Senators said.

The preference system also gives a leg up to advanced degree holders, those being paid a high wage, and those with valuable skills, it said.

"Congress created these programmes to complement America's high-skilled workforce, not replace it. Unfortunately, some companies are trying to exploit the programmes by cutting American workers for cheaper labour," Grassley said.

"We need programmes dedicated to putting American workers first. When skilled foreign workers are needed to meet the demands of our labour market, we must also ensure that visa applicants who honed their skills at American colleges and universities are a priority over the importation of more foreign workers," he said.

"Our bill takes these steps to ensure that the programmes work for Americans and skilled foreign workers alike," said Grassley, chairman of the Senate Judiciary Committee.

The legislation restores Congress' original intent in the H1B and L1 visa programmes by increasing enforcement, modifying wage requirements and securing protections for both American workers and visa holders.

"Reforming the H1B and L1 visa programmes is a critical component of fixing our broken immigration system and must be included in comprehensive immigration reform legislation," Durbin said.

"For years, foreign outsourcing companies have used loopholes in the laws to displace qualified American workers and facilitate the outsourcing of American jobs. The H1B and L1 Visa Reform Act would end these abuses and protect American and foreign workers from exploitation. I thank Senator Grassley for partnering with me on this important bipartisan legislation," he said.

The bill among other things would crack down on outsourcing companies that import large numbers of H1B and L1 workers for temporary training purposes only to send the workers back to their home countries to do the same job.

Specifically, it would prohibit companies with more than 50 employees, of which at least half are H1B or L1 holders, from hiring additional H1B employees, the statement said.