Sales of the iPhone 16 series are currently banned in Indonesia

Indonesia Expects $1 Billion Investment Commitment From Apple in a Week

Apple has no manufacturing facilities in Indonesia, a country of about 280 million people, but has since 2018 set up application developer academies

03 Dec 2024, 13:36 by Reuters · Gadgets 360

Highlights

iPhone 16 sales are currently banned in Indonesia
Indonesia says Apple failed to meet investment requirements
The country plans to increase the requirement for locally sourced parts

Indonesia is expecting to get a $1 billion (roughly Rs. 8,470 crore) investment commitment from tech firm Apple Inc in a week, its investment minister said on Tuesday, after the government banned iPhone 16 sales for failing to meet local content rules.

Indonesia stopped sales of the smartphone because it requires those sold domestically to comprise at least 40% locally-made parts, which it said Apple had not adhered to. Indonesia plans to increase this requirement, a deputy minister said on Tuesday.

Investment Minister Rosan Roeslani told lawmakers in a hearing that Indonesia expects more investment if Apple decides to make the country part of its supply chain.

Apple did not immediately respond to a request for comment.

"Whoever benefits from the sales must invest here, create jobs here. What's important is how the global value chain moves here, because once it does, suppliers follow," Rosan said, adding the investment commitment is part of a first phase.

Apple had previously made a $100 million (roughly Rs. 850 crore) investment proposal to build an accessory and component plant in Indonesia to reverse the ban, but the government rejected that on the grounds it did not meet the principal of fairness.

Apple has no manufacturing facilities in Indonesia, a country of about 280 million people, but has since 2018 set up application developer academies. Indonesia considers that strategy an attempt to meet local content requirement for the sale of older iPhone models.

Companies typically increase the local composition through local partnerships or by sourcing parts domestically.

© Thomson Reuters 2024