British Home Secretary Amber Rudd's announcement of the new policy is expected to make it tougher for British firms to hire professionals from countries outside the EU, like India.
The measures will make it difficult for foreigners to work and study in the UK. Indians are likely to be hit the hardest.
Labour party attacked Rudd's announcement which vowed extra curbs on foreign workers and students to "change the tide" of public opinion on immigration.
"The tone of the Conservative conference has become increasingly xenophobic. [Prime Minister] Theresa May has presided over the return of the Nasty Party. Whether it's doctors, migrants or Europe, the Tories are blaming anyone but themselves for their failure," Burnham said.
"The idea of British companies producing lists of foreign workers runs counter to everything that this country has ever stood for. It would be divisive, discriminatory and risks creating real hostility in workplaces and communities."
Amid the attack, Rudd today defender her announcement.
"We should be able to have a conversation about the skills we need. I don't think we should have a situation where we can't talk about immigration. We must not ignore the fact that people want to talk about immigration and if we do talk about immigration don't call me a racist," Rudd told BBC.
Proposals unveiled by Rudd, which are to be subject to a consultation period, companies recruiting staff from outside the EU, including from India, will have to demonstrate what they have done to "foster a pool of local candidates" and show what impact the choice of overseas candidates have on the local labour market.
They could be required to be clear about the "proportion" of their workforce which is international, a practice which the UK Home Office says is standard in the US.
Business groups have reacted with caution to the proposals, warning they would limit the ability to recruit people with the right skills for the job.
Adam Marshall, acting director general of the British Chambers of Commerce, said: "Companies do so much in the UK to train up their workers and, of course, look for local hires before going to the overseas market.
"I don't think they should be penalised for having to do so when they have specific skills needs.
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