US President Donald Trump has unveiled new merit and points-based immigration policy that replaces the existing green cards with 'Build America' visa and substantially hikes the quota for young and highly-skilled workers from 12 to 57 per cent, a move likely to benefit thousands of Indian professionals.

Trump said the current "broken" system of legal immigration has failed to retain and attract brilliant talent from across the globe.

The president said he was proposing a merit-based immigration system wherein permanent legal residency would be given based on points for age, knowledge, job opportunities and civic sense, besides passing English and civics tests.

"We discriminate against genius. We discriminate against brilliance. We won't anymore once we get this passed, and we hope to get it passed as soon as possible. We want these exceptional students and workers to stay, flourish and thrive in America," Trump said.

"Under the senseless rules of the current system, we're not able to give preference to a doctor, a researcher, a student who graduated number one in his class from the finest colleges in the world, anybody," he said in a policy address in the Rose Garden of the White House.

As a result of the "broken" rules, the annual Green Card flow is mostly low-wage and low-skilled, Trump rued, adding that the newcomers compete for jobs against the most vulnerable Americans and put pressure on the social safety net and generous welfare programmes.

Every year the US issues nearly 1.1 million green cards, which gives foreign nationals lifetime permission to live and work in the US and a path to citizenship in five years.

Currently, most of the cards are issued based on family links and diversity visa, and a small section is given to people who are professionals and highly-skilled.

Trump said he wanted to change that and unveiled a new proposal.

"The biggest change we make is to increase the proportion of highly-skilled immigration from 12 per cent to 57 per cent, and we'd like to even see if we can go higher. This will bring us in line with other countries and make us globally competitive," Trump said.

The move is likely to benefit hundreds and thousands of Indian professionals and skilled workers whose current waiting period for a Green Card on an average is more than a decade.

The current system prioritises the immediate family of new Americans, spouses and children, he said.

"Our proposal fulfils our sacred duty to those living here today while ensuring America remains a welcoming country to immigrants joining us tomorrow. We want immigrants coming in. We cherish the open door that we want to create for our country, but a big proportion of those immigrants must come in through merit and skill," he said.

The White House plan makes no change to the number of green cards allocated each year.

Trump said instead of admitting people through "random chance", he will establish a "simple and universal criteria" for admission to the US.

"No matter where in the world you're born, no matter who your relatives are, if you want to become an American citizen, it will be clear exactly what standard we ask you to achieve. It will be made crystal clear," Trump said.

"This will increase the diversity of immigration flows into our country. We will replace the existing green card categories with a new visa, the Build America visa - which is what we all want to hear," Trump said.

He said like Canada and many other countries, his administration seeks to create an "easy-to-navigate points-based" selection system.

"You will get more points for being a younger worker, meaning you will contribute more to our social safety net. You will get more points for having a valuable skill, an offer of employment, an advanced education, or a plan to create jobs," he said.

In the absence of such a system, America is losing people who want to start companies, and in many cases, are forced to leave the country and go back to where they came from, he said.

He said priority will also be given to higher-wage workers to ensure the American labour is never undercut.

"Finally, to promote integration, assimilation, and national unity, future immigrants will be required to learn English and to pass a civics exam prior to admission," Trump said.

According to the president, Americans with criminal records are getting a second chance at life in higher numbers than ever before.

Unfortunately, the current immigration rules allow foreign workers to substitute for Americans seeking entry-level jobs, he said.

"So, foreign workers are coming in and they're taking the jobs that would normally go to American workers," Trump said.

"America's immigration system should bring in people who will expand opportunity for striving, low-income Americans, not to compete with those low-income Americans," he said.

The immediate reaction to the proposed reforms showed a bitter political divide.

Congressman Mike Rogers, a ranking member of the House Homeland Security Committee, said a White House plan to boost border security and reform the immigration system is a welcome step.

Senate Minority Leader Chuck Schumer dubbed it as a political document.

"(This) isn't a serious attempt at immigration reform; if anything, it’s a political document that is anti-immigration reform," he said.

"I found the announcement today to be short-sighted," said Kamala Harris, the first Indian-origin Senator and a 2020 Democratic presidential candidate.