The order will also direct US agencies to propose rules to prevent immigration fraud and abuse in the program.
Trump signed the order targeting the programme popular with Indian technology professionals at the Kenosha, Wisconsin headquarters of tool maker Snap-on Inc yesterday.
Thomas Gibson, chief executive of lobby group the American Iron and Steel Institute, said in a statement that "Buy American" provisions "are vital to the health of the domestic steel industry, and have helped create manufacturing jobs and build American infrastructure".
Around 85,000 foreign workers are admitted to the United States each year under the current H-1B visa programme, with most coming to work in high-skill industries.
These issues need to be addressed, Trump said.
"Hitherto, many Indians obtained H-1B visas through various methods to join bogus companies".
The country that's going to be affected the most by this new order is India, and several politicians and business leaders have already voiced out their concerns towards the new restrictions of the program that are going take place.
Srinivasan said service-based companies were to blame for violations by companies using H-1B visas.
Morgan Stanley's quarterly profits surge on trading gains
Following the sale, the president now directly owns 836,809 shares of the company's stock, valued at approximately $36,668,970.38. Morgan Stanley's bond trading business has been a near-perennial loser in the years following the financial crisis.
The order comes as part of the President Trump's campaign to put "America First".
The administration's goal is to ensure such visas are given to the most qualified or highest-paid applicant, according to two senior officials.
The Information Technology and Innovation Foundation (ITIF), a leading USA science and tech policy think tank, hoped that the goal of Trump's executive order on the H-1B programme is "mend it, don't end it". "Many of the changes to the H-1B program contemplated by the administration would require legislative action or rulemaking and would take time to go through the necessary processes".
In his new directive, the president is targeting the H-1B visa program, which the White House says undercuts USA workers by bringing in large numbers of cheaper, foreign workers and driving down wages.
President Trump has set the wheels in motion for H-1B visa reform. "It's America first. You better believe it".
According to Kishore Kumar Kovuru, a software engineer who returned to India after working in the U.S. for a decade, Indians who were getting extension of H-1B visa every two years might find it hard now.
About 85,000 H-1B visas are distributed annually by lottery. Sadly, this will come at a great cost to our local economy where foreign-born Tennesseans play a critical role in filling the skilled-employment gap, driving economic growth, and creating jobs for US born workers. Commerce Secretary Wilbur Ross will review how to close loopholes in the current rules and report back to Trump, especially on waivers to the buy-American rules in the nation's trade deals.