Indonesia Rejects Apple's $100 million investment proposal calling it 'inadequate'

Indonesia said a $100 million investment proposal from Apple to build an accessory and component plant was not enough for the country to allow the tech giant to sell its latest iPhone model, its industry ministry said on Monday.

Indonesia in November banned sales of Apple's iPhone 16 after it failed to meet requirements that smartphones sold domestically should comprise at least 40 percent locally-made parts.

Indonesia has also banned the sale of Alphabet's Google Pixel phones over a similar lack of use of local components.

Indonesian authorities last week said Apple had put forward the investment proposal to lift the sales ban.
Apple did not immediately respond to a request for comment.

"We have done an assessment and this (proposal) has not met principles of fairness," Industry Minister Agus Gumiwang Kartasasmita told a press conference, comparing the proposal to Apple's bigger investments in neighboring Vietnam and Thailand.

Apple has no manufacturing facilities in Indonesia, but has since 2018 set up application-developer academies, which Jakarta considers a way for the company to meet local content requirement for the sale of older iPhone models.

Companies usually increase the use of domestic components to meet such rules through partnerships with local suppliers or by sourcing parts domestically.
Agus said Apple had an outstanding investment commitment of $10 million it should have carried out before 2023. He also wanted Apple to commit to new investment until 2026.

The ministry would invite Apple to visit Indonesia to negotiate further, Agus said.

The development comes shortly after the iPhone maker made a proposal worth $100 million to setup a plant for manufacturing its accessories and other components in the country. The proposal came after the country banned the use iPhone 16 imported from overseas market within its borders. The announcement by the Indonesian government followed Apple CEO Tim Cook's visit to Jakarta in April this year wherein he explored the possibility of manufacturing some Apple devices in the country with President Joko Widodo.