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Wipro chief: Indian companies heading for the top

The difference between Indian outsourcers and big services companies is blurring--but their wages aren't anytime soon.

The already-blurred distinction between Indian outsourcers and the traditional big services companies will soon disappear, the head of tech giant Wipro says.

Azim Premji Azim Premji

As Indian services companies look at bigger deals and more complex consulting tasks, traditional services companies such as Accenture are expanding their presence in India. The "demarcation lines" between the two are vanishing, said Azim Premji, chairman and managing director of India's Wipro.

"They are copying our model, we are copying their model, and the customer is the net gainer," said Premji, who has been running Wipro for 40 years, growing it from a $2 million company to a $1.8 billion IT services organization. He was also listed as the 25th richest man on the planet by Forbes earlier this year.

"I think you will have a least two (Indian) companies that are in the top 10 global-services providers in the next five years. I think customers will have the top three or four Indian companies in their evaluation set for all major orders," he said.

Premji also said it would be decades before rising wages reduce the cost-saving potential of outsourcing high-tech work overseas to Indian companies.

"Wages are going up--they're going up 12 (percent) to 14 percent a year," he said. "But the nice thing is that if you compare yourself with Western nations, our average salary for an engineer from college is about $7,500 a year. A similar engineer in the U.K. costs $55,000 a year, roughly."

He continued: "If your salaries were to go up by 3 percent a year, and ours were to go up by 13 percent a year, it will take 25 years for the two salaries to merge."

Steve Ranger of reported from London.