JPMorgan says India is its No. 1 market in Asia; investors are unlikely to return to China this year

India is JPMorgan's top pick in Asia, and one of its favorite markets globally, the investment bank's Asian Equity Strategist Mixo Das told CNBC.

"It's our number one market at this point," he said, highlighting that the South-Asian nation will continue to benefit enormously as companies increasingly adopt a "China plus one" strategy. 

Although Vietnam is also a strong contender for companies looking to set up manufacturing facilities,  "India has sufficient size and scale to fully replace or fully augment the kind of capacity that global investors and global manufacturers seem to want," Das told CNBC's "Street Signs Asia" on Tuesday. 

Apple opened its first retail stores in India in April and started producing the iPhone 15 in the country in August, fueling optimism that other large companies would also looks at India as a favorable manufacturing destination.  

Companies that already have a base in India are also expanding production capacity. The country's largest automaker, Maruti Suzuki, announced last week that it would invest $4.2 billion to build a second factory in India.

Even Vietnamese electric auto maker VinFast said earlier this month it aims to spend around $2 billion to set up a factory in India. 

All this has bolstered investor sentiment, which had already been high with India's stock market emerging as one of Asia's best performers last year.

The Indian markets have kick-started the new year on a strong footing as well, with both the Nifty 50 and BSE Sensex hitting record highs of 22,081.95 and 73,000, respectively, during Asia's Monday afternoon trading session.

While India remains JPMorgan's favorite, China's economy has slowed and its stock markets clocked annual declines for a third straight year in 2023.