The iPhone 16 series was banned in Indonesia last month due to Apple’s unmet investment commitments to the country. Cupertino responded with a pledge to invest $10 million, followed by a second promise to bump up the figure by an extra $100 million which would meet the initially committed sum of IDR 1.71 trillion ($109 million) in local R&D facilities.
It seems Apple’s increased investment commitments are still insufficient. Indonesia’s Industry Ministry reportedly declined Apple’s offer at an internal meeting headlined by Minister Agus Gumiwang Kartasasmita. Per a spokesperson, the local government wants Apple to invest more and make Indonesia part of its global supply chain.
From the government’s perspective, of course, we want this investment to be larger. A larger investment would facilitate the development of Indonesia’s domestic manufacturing sector, helping the country become a part of Apple’s global supply chain. – Febri Hendri Antoni Arif, ministry spokesperson
Indonesian law mandates that foreign companies must provide 40% local content to operate in the country as part of the Domestic Component Level (TKDN) certification. Companies can fulfill those requirements by either manufacturing products locally, developing software locally or setting up R&D centers.
Apple had originally pledged upwards of IDR 1.71 trillion ($109 million) in local R&D facilities but has only invested IDR 1.48 trillion ($95 million). Apple has reportedly considered expanding its accessories and components production in Indonesia, which appears to be what the local government is after. By not meeting the investment criteria, Apple now faces an indefinite ban on its iPhone 16 and Apple Watch 10 series in Indonesia.
