India's Wipro plans big expansion in China

Wipro is diversifying the geographic mix of its business in response to the impact of economic problems in the U.S. market

Indian IT outsourcing company Wipro plans a big expansion in China in the next two years, its chief operating officer said in Tokyo on Tuesday.

The company has about 200 staff working in China and another 200 working in India supporting its China-based operations, but expects this to rise to 2,000 staff in the next two years, said A.L. Rao.

"Our growth strategy in China is to address the requirements of our global clients in the first phase," he said. Most of the company's current business in China is done with such companies, helping their local operations rather than dealing with Chinese companies. For example, Wipro recently won a deal to implement an SAP system at a global forest products group at 20 locations worldwide including China.

But Rao said he sees that changing in the future.

"Down the line, we would like to see China as another resource for talent and to set up development centers there and maybe go after Chinese clients," he said during a news conference at the Foreign Correspondents' Club of Japan.

The company is currently pushing expansion in markets outside the United States in response to the impact of the subprime mortgage problems in that market.

"Wipro's exposure to the U.S. market is 58 or 59 percent, and we are expanding considerably in other geographies, including Europe and Japan. We have been very strong in India, Asia Pacific, and the Middle East, and they are growing significantly. We are now diversifying the geographic mix in our business."

On the subject of India's IT prowess, Rao said that he doesn't see the company being toppled from its perch anytime soon by faster-growing developing markets.

"With the amount of technical talent available and also coming to the market and with the current exchange rates and purchasing parity difference, the cost effectiveness of the Indian software industry will continue," he said. "India will continue to provide cost-effective software services."

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