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 H-1B visa programme and could hurt Indian IT firms.

"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," the proponents of the legislation said.

The bill will require US Citizenship and Immigration Services to prioritise for the first time annual allocation of H-1B visas. It will ensure the students being educated in the US receive preference for an H-1B visa.

"For years, foreign outsourcing companies have used loopholes in the laws to displace qualified American workers and facilitate the outsourcing of American jobs. The H-1B and L-1 Visa Reform Act would end these abuses and protect American and foreign workers from exploitation," they said.

The bill among other things would crack down on outsourcing companies that import large numbers of H-1B and L-1 workers for temporary training purposes only to send the workers back to their home countries to do the same job. It explicitly prohibits the replacement of American workers by H-1B or L-1 visa holders.