Indonesian Investment Minister announced on Tuesday that Indonesia is expected to receive a commitment of one billion US dollars in investment from technology giant Apple within a week. This comes after Indonesia’s government had banned the sale of the iPhone 16 due to Apple’s failure to comply with the local manufacturing content rules.
In late October of this year, Indonesia halted the sale of iPhone 16 phones because Indonesian regulations require phones sold in the country to contain at least 40% of locally manufactured components, and Indonesian authorities stated that Apple did not meet this requirement. A deputy minister of the country revealed on Tuesday that Indonesia plans to raise this requirement.
Minister of Investment, Rosan Roeslani, told lawmakers during a hearing that Indonesia would expect more investment if Apple decides to include Indonesia in its supply chain.
Apple has not responded to this development yet.
Rosan stated, “Whoever benefits from the sales, they must invest here and create job opportunities. It is important how the global value chain operates here, because once it operates, suppliers will follow.” He mentioned that the investment commitment is part of the first phase.
Apple had previously proposed a $100 million investment plan to establish component and assembly factories in Indonesia to overturn the ban, but the government rejected the proposal citing non-compliance with fair principles.
Indonesia has a population of approximately 280 million, making it the fourth most populous country in the world. However, Apple does not have manufacturing facilities in this country.
In 2018, Apple established an Application Development Academy in Indonesia. The country viewed this strategy as a way to meet the local component requirements for selling older model iPhones. This is because companies often increase local components through local partnerships or sourcing parts domestically.
(This article was based on a report from Reuters)