Indonesia rejects Apple’s investment offer, citing inadequate proposal

Indonesia has rejected a US$100 million investment proposal from Apple aimed at lifting the iPhone 16 sales ban, maintaining the prohibition on its sale in the country, according to several media reports. 

This follows Indonesia's ban on iPhone 16 sales in early November, as the device does not comply with the country's regulations regarding using locally made components, according to the industry ministry. According to the regulations in Indonesia, certain smartphones sold domestically need to contain at least 40% of parts manufactured locally and the iPhone 16 has not met the requirement.

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Following the ban, Apple recently offered to increase its investment in Indonesia to persuade the government to lift its sales ban on the iPhone 16. The proposal will see Apple invest almost US$100 million into the country. In addition, the US$100 million investment will contain a research and development center programme and a professional developer academy. 

However, Industry Minister Agus Gumiwang Kartasasmita said on Monday (25 November) that Apple’s proposal has not met principles of fairness, comparing the proposal to Apple's bigger investments in neighbouring Vietnam and Thailand, according to multiple media reports such as The Straits Times and Reuters.

He said that Apple has not yet invested in production facilities or factories in Indonesia. The ministry has urged Apple to establish a production facility or factory in Indonesia "based on principles of fairness," so that the company does not need to submit an investment scheme proposal every three years, he added. Despite the sales ban, the Indonesian government permits the entry of iPhone 16 devices into the country as long as they are not being sold commercially.

MARKETING-INTERACTIVE has reached out to Apple for a statement. 

Apart from Apple, Google is also facing phone bans in Indonesia. The Indonesian government said that the Google Pixel smartphones will be banned for failing to meet domestic content requirements for the same reason.

Google must obtain local content certification before resuming sales, the Industry Ministry spokesperson said, according to Tech Crunch. He added that the local content rule and related policies are made for fairness for all investors that invest in Indonesia.

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