Apple CEO Tim Cook, during earnings call in July had said: “We set June quarter records in the Americas, in Europe and the rest of the Asia Pacific region. We also saw June quarter revenue records in both developed and emerging markets, with very strong double-digit growth in Brazil, Indonesia and Vietnam and a near doubling of revenue in India.” A recent report by JP Morgan on `Apple Supply Chain relocation’ predicted that Apple “is likely to move about 5 per cent of iPhone 14 production to India from late 2022 and reach 25 per cent by 2025”.

“US-China trade tensions kicked off the production relocation cycle and the search for a `China+1′ manufacturing approach for the Apple supply chain from late 2018,” the report said.

COVID-19 put the brakes on this over the last two years, but with pandemic concerns easing, “we have seen more companies in the Apple supply chain re-accelerating supply chain relocation efforts”, the brokerage said in its report.

“Supply chain risks (such as COVID-19-related lockdowns in Shanghai/Shenzhen) are likely to be a primary driving force for these moves in the next two to three years,” it added.

Southeast and South Asian countries (like India, Vietnam, Thailand) have become preferable locations for geopolitical diversification away from China for Apple food chain vendors, given their lower labor costs, sufficient skilled manpower support and appealing policies and government support, according to JP Morgan analysts.

While a booming market for smartphones has added to India’s sheen, New Delhi’s policy push in the electronics sector has nudged large global suppliers to expand in India, and driven new players to set up base. After tasting success in local smartphone manufacturing, India is moving swiftly to replicate the success with other parts of electronics ecosystem, as it makes solid efforts to cut reliance on imports.

The government has unveiled attractive incentives to spur local production and export of telecom and networking equipment as well as IT products, and a Rs 76,000 crore semiconductor scheme was announced late last year to boost local manufacturing of chips and display panels.