The Indonesian Government Considers Apple's Investment Proposals Not Administrative

Minister of Industry Agus Gumiwang Kartasasmita (photo; dock. between)

The Indonesian government considers the investment proposal worth 100 million US dollars (Rp 1.5 trillion) proposed by Apple to build an accessories and component factory that does not meet the requirements so that the technology company is allowed to sell the latest iPhone 16 model in the country. This was conveyed by the Minister of Industry, Agus Gumiwang Kartasasmita, at a press conference on Monday, November 25.

Since November, Indonesia has banned the sale of the iPhone 16 because Apple failed to meet the requirements for using a local component of at least 40% on each phone sold domestically. Apart from Apple, Alphabet with Google Pixel products is also subject to similar bans due to not complying with the local content rules.

Agus stated that investment proposals from Apple have not met the principle of justice, especially when compared to Apple's larger investments in neighboring countries such as Vietnam and Thailand.

"After we conducted the assessment, this proposal did not meet the principle of justice," said Agus. He also highlighted that Apple still has an investment commitment of 10 million US dollars (Rp158.4 billion) which should have been completed before 2023. In addition, the government wants Apple to commit to new investments until 2026.

Indonesia has invited Apple to further negotiate on this matter. Agus emphasized that his party hopes that Apple can meet local content requirements through cooperation with local suppliers or by producing components domestically.

Apple itself has not yet provided an official response to this issue.

Since 2018, Apple has established an app developer academy in Indonesia as a way to partially meet local content requirements for the sale of previous iPhone models. However, this step is not enough to comply with new stricter rules regarding the use of local components on electronic devices.

Meanwhile, the ban on the iPhone 16 and Google Pixel shows Indonesia's efforts to encourage an increase in local added value in the technology sector, while at the same time pressuring multinational companies to invest more in the country.