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Indonesia is maintaining its ban on the sale of Apple’s iPhone 16, saying the US tech giant’s proposal to invest $1bn in local manufacturing is still not enough to meet the country’s local content requirements.
President Prabowo Subianto’s government banned the sale of the latest iPhone in October due to Apple’s failure to meet a regulation that requires 40 per cent of content in handsets and tablets to be sourced locally. Google’s Pixel phones were also banned for not meeting the rule.
Apple had proposed setting up a $1bn plant to produce its AirTag tracking device with the help of a local partner, but government officials said this week that the facility would not contribute towards the local content requirement for iPhones.
“As of this afternoon, the Ministry of Industry does not have the basis to issue the local content certificate for Apple products, especially the iPhone 16,” Agus Gumiwang Kartasasmita, Indonesia’s industry minister, said on Wednesday, according to local media. He added that Apple’s investment proposal was “not enough”.
On Tuesday, investment minister Rosan Roeslani said Apple had “committed for the first stage of development” of an AirTag facility costing $1bn and the plant would be operational by early 2026.
Apple did not respond to a request for comment.
Apple initially proposed investing just $10mn last year and then upped this to $100mn, with the industry ministry saying the offers were insufficient. Officials say those figures were small compared with the company’s sales in Indonesia.
Indonesia has repeatedly called for more investment from Apple, which has four developer academies in the country to train students and engineers to develop apps, but no manufacturing facility.
Jakarta’s demands highlight how the world’s fourth-most populous country is leveraging its large consumer market to attract foreign investment. The number of active mobile phones in Indonesia totals 354mn — exceeding the population of about 280mn, the industry ministry has said.
Indonesia has long used trade regulations to attract foreign investment and onshore manufacturing, and to protect its domestic industries.
However, some businesses have criticised the rules as protectionist and the local content requirement — which is different across industries and calls for a certain percentage of goods to be sourced locally — has deterred some investors.
The American Chamber of Commerce in Indonesia has said it is “very challenging” for foreign companies to meet local content thresholds because domestically made products are not available for some sectors such as electronics.
Bans on Apple and Google products could also dent Indonesia’s investor appeal, businesses and economists have warned, with regional peers such as Vietnam or Malaysia having more investment-friendly policies.
Apple executives are in Jakarta this week to discuss the proposed investments with the government.
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