A young man quits his US university course and goes on to achieve fame and fortune in the IT industry. Anyone spring to mind? Bill Gates famously left Harvard to pursue his dreams with Microsoft - but he wasn't the first to follow this route to the top.

Azim Premji left Stanford University in 1966 to take control of the family vegetable oil business in India after his father died.

But when West India Products became Wipro and diversified into IT software and services, Premji was on the way to becoming the richest man in the subcontinent, and his company one of the growing global players in offshore outsourcing.

This year, Wipro will top $1bn (£0.6bn) in sales, and is growing at more than 25 per cent a year as the offshore revolution explodes.

Computing talks exclusively to Wipro's chairman about the challenges of managing such a rapidly expanding business and the backlash in the West on the perceived loss of jobs to India.

What is behind the recent success of the Indian IT industry?

Most chief executives are putting pressure on their organisations to obtain more value for money. New customers very often come here for cost arbitrage, but they expand operations here for the technology, quality and cycle time management they get, and that sets them in.

People are now looking at services the way they did at manufacturing 20 years ago - the concept of a global delivery model. If something can be executed globally at better value, customers are becoming increasingly open to it.

They appreciate the sensitivities on people, but as part of a global drive, it is better to have a competitive, well-positioned company that grows and creates jobs, than to be non-competitive and contract out - so losing jobs indirectly.

How do you cope with such dramatic growth in a developing country such as India?

Raw material is not a problem here. We produce about 280,000 graduate engineers a year, plus another 300,000 diploma engineers. The quality of talent is good by global standards. They are eager to learn and young.

The challenge is in the shortage of middle and senior management. The surging demand is such that you can't produce people at that level fast enough.

We are on top of being able to select, induct and train, and build quality processes in new recruits. The biggest challenge is to maintain cultural continuity.

For that you require high interaction with middle management of the fresh teams. It is resolvable, but a big challenge and requires a lot of time from management.

With major players such as IBM or EDS setting up in India, will this prove a problem for you?

The global service providers are setting up in India, China, the Philippines. Tomorrow it will be Bangladesh and Vietnam.

When they come they want to jump-start and ramp up quickly. They are indiscriminate in hiring people with little experience and spoil the market temporarily. But it will settle down. These multinational suppliers are responding to customers who say they want a global delivery model.

We competed overseas with them and now we compete with their offering from India. This will increase, and we have to prove ourselves better in terms of execution, delivery, quality, and customer satisfaction, which some of us will do successfully, and some less so.

But the biggest concern for the multinationals is how they prevent cannibalisation of their rates. If you've been selling at $125 (£73) per hour and suddenly you're offering a delivery model at $25 (£15), the customer will say: "Why was I paying $125 before?" It's a big challenge for them to face.

How long can India maintain its cost advantages?

A lot of customers raise this issue with us. My answer is simple: an engineer in India costs about $6,000 (£3,500) per year; in the US about $40,000 (£23,000). The US costs go up three per cent a year, that's $1,200 (£700) per year. If our costs go up by 20 per cent, which they won't, on a $6,000 base that's $1,200 per year.

Relatively, our competitive position remains. It's not because we underpay our people, it's just that our cost of living is less than in the developed countries.

The cost of living in India is commensurate with the salaries. Graduates have a decent standard - 90 per cent of our employees have a car or a motor bike. That was unthinkable five or six years ago.

What is your response to the vocal criticism of offshore outsourcing in the UK and US?

I empathise with the loss of jobs - it happens in this country, too. But there is a certain reality of global competition. Companies that want to be successful have to be able to compete. To do that they must have productivity, quality products and a cost structure.

IT services is a significant component of cost on a company's make-up. If global sourcing, as in manufacturing 20 years ago, brings competitive costs, it has to happen. Those companies that don't make it happen are disadvantaged.

There will be ups and downs but eventually it will create jobs.

Take two simple examples: the US automobile industry opened up to Japanese competition. That industry makes three times as many cars today as it did 15 years ago, and employs three times the number of people.

In the steel industry, not one US company is in the world top 10. The US industry employs a third of the people it did 15 years ago, and produces 60 per cent of what it once produced. These facts speak for themselves.

Companies which are competitive do well in the global scene; companies which are not start to waste away.

When a company closes down a call centre, it closes down 400 people and it's very visible in the local community. Part of the over-reaction is because the jobs are less easily re-employable. I can appreciate it from the host country's point of view.

But can you imagine assembling televisions in London? It is a natural migration that is taking place.

What can the global IT industry learn from the success of India?

Indian companies have invested more in training than overseas companies. We have invested in deeper quality processes.

Because we started off with a major brand disadvantage we had to prove to the customer that we were better, and invest in processes which gave us an execution model which was better. That is built into our culture.

The third thing they have to learn is modesty. We have to fight our battles, we respect our customers more. They have taken their customers for granted and now those customers have suddenly woken up.