Indonesia and Apple discuss investment proposal linked to iPhone sale ban

JAKARTA - Indonesia’s industry minister met representatives of Apple on Jan 7 to discuss the company’s potential investment in the country, a prerequisite for the tech giant to sell its latest iPhone 16 locally, the minister said.

Indonesia in 2023 banned sales of the iPhone 16

after it failed to meet requirements that smartphones sold domestically should comprise at least 40 per cent locally made parts.

Apple currently has no manufacturing facilities in Indonesia, a market of 280 million people, but has since 2018 set up application developer academies in the South-east Asian country, which allowed it to sell older models.

Industry Minister Agus Gumiwang Kartasasmita told reporters he met with Apple’s vice-president of global government affairs, Mr Nick Ammann, and other executives and that negotiations of Apple’s new investment proposal were underway.

“We do not set any time frame for a deal, but we have set a target for the substance of a deal,” Mr Agus said.

He declined to provide details on Apple’s proposal or Indonesia’s demand.

Another Indonesian Cabinet minister said in 2023 that

Apple had offered to invest US$1 billion (S$1.36 billion)

in a manufacturing plant that produces components for smartphones and other products in order to comply with regulations and get the sales ban lifted.

Mr Agus declined to confirm those details, but said hypothetically “if it is US$1 billion, it is not sufficient”.

After meeting with officials from the Industry Ministry, Mr Ammann said “great discussion”, without providing any details.

Apple did not respond to a request for comment.

Indonesia has previously said Apple has an outstanding investment commitment worth US$10 million it had not fulfilled as part of its three-year investment plan in the country, which ended in 2023.

It is required to make a new commitment for 2024 to 2026 to meet the local content mandate. REUTERS