JAKARTA – Indonesia has declined a US$100 million investment proposal from Apple, which aimed to resolve the ongoing sales ban on the iPhone 16 in the country. The Indonesian government insists that the offer does not meet its “fairness principles”, emphasizing that Apple must do more to align with local investment regulations.

Background of the Ban

In October 2024, Indonesia enforced a ban on the marketing and sale of the iPhone 16 due to Apple’s non-compliance with a regulation mandating that 40% of smartphone components sold locally must be manufactured domestically. This policy is part of Indonesia’s broader efforts to attract major foreign investments and stimulate its manufacturing sector.

Apple’s response was a proposed US$100 million investment, aimed at addressing the ban and permitting domestic sales of the new iPhone model. However, the offer was rejected, with the government arguing that Apple’s commitment fell short, especially compared to its investments in other countries.

Government Demands

Industry Minister Agus Gumiwang Kartasasmita stated that Apple has not yet established any production facilities or factories in Indonesia, which is a key condition for compliance. In a statement released on November 25, the minister criticized Apple for submitting temporary investment schemes every three years instead of committing to long-term infrastructure.

He urged Apple to invest in a production facility or factory in Indonesia to demonstrate fairness. “Currently, Apple still has not invested in production facilities or factories in Indonesia,” Kartasasmita remarked, emphasizing the need for a more substantial and permanent presence.

Limited Access to iPhone 16

Despite the ban on commercial sales, individuals in Indonesia are still permitted to bring the iPhone 16 into the country for personal use. However, the device cannot be sold or marketed domestically, limiting its accessibility to Indonesian consumers.

Comparison to Other Markets

The government highlighted Apple’s significant investments in other markets such as India and Vietnam, where the company has established manufacturing facilities. Indonesia is seeking a similar level of commitment to ensure equitable treatment and benefit from Apple’s global expansion strategy.

A Push for Fair Investment

Indonesia’s hardline stance underscores its intent to hold multinational corporations accountable to local economic priorities. The rejection of Apple’s proposal sends a clear message: foreign companies must contribute meaningfully to Indonesia’s development rather than offering short-term solutions.

This conflict marks a pivotal moment in the relationship between Apple and one of Southeast Asia’s largest markets, raising questions about the company’s future approach to balancing global market demands with local compliance challenges. (zai)