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Your next iPhone might be made in India as a result of the U.S.-China Trade War

As trade tensions between the United States and China continue to escalate, tech companies from both countries have been left to bear the heaviest brunt. With soaring tariffs and uncertainty, their businesses have taken both a financial and production hit. India, as per a Reuters report, might now be gearing up to capitalize on this precarious situation.

The country’s officials are reportedly planning to ease regulations and offer incentives in an effort to sway foreign companies to shift their supply chains to India. Several government ministries, Reuters says, met a few days ago to “discuss a list of target companies” and have been asked to submit (possibly revised) policies. Apart from electronics, India has trained its sights on eight other sectors such as automobiles, pharmaceuticals, telecom, and more.

Some of the companies it could potentially attract include Apple, Foxconn, and Wistron, a Taiwanese firm which is already assembling a few, outdated iPhone models in India.

Local governments will reportedly approach these businesses with a “complete package” that will detail why they should consider India and other incentives in the coming days.

The U.S.-China trade war has so far forced tech companies to rethink their priorities and even relocate their production from China. Google, for instance, may shift the manufacturing of its line of Pixel smartphones to an old Nokia factory in Vietnam.

Compared to Vietnam, however, India could be a more attractive destination to companies looking for alternatives. It nearly matches China in scale, labor, and a few other production factors.

In the last couple of years, India has emerged as a hotbed for tech giants. Under the government’s “Make In India” campaign, a series of companies have managed to establish large-scale production lines and headquarters in the country.

Last week, Amazon unveiled its most expansive campus in Hyderabad, a city in the southern state of Telangana. A majority of leading smartphone makers like Samsung, Oppo, and Xiaomi now produce their devices entirely in India.

India has also relaxed its foreign investment norms, making it easier for companies like Apple to set up single-brand retailer chains. Currently, Apple assembles a handful of its affordable models for India, including the iPhone 7 and iPhone SE, in that country. For the past year or two, Apple has been struggling to regain its lost market share in India and lobbying the government to relax regulations. This rumored move by India could offer Apple a stronger foothold in the fastest-growing smartphone market.

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