Indonesia is keeping its ban on Apple’s iPhone 16, saying no to the company’s $1 billion investment offer because it doesn’t meet the rules for using local materials. The government, led by President Prabowo Subianto, put the ban in place in October. They said Apple didn’t follow the rule that 40% of parts for phones and tablets must come from Indonesia. Google’s Pixel phones were also banned for the same reason.
Apple wanted to build a $1 billion factory in Indonesia to make AirTags, working with a local partner. However, Indonesian officials said this wouldn’t help Apple meet the local content rules for iPhones. Industry Minister Agus Gumiwang Kartasasmita said on Wednesday that Apple’s offer wasn’t enough to get the required certification. Earlier, Investment Minister Rosan Roeslani mentioned that the first part of the AirTag factory would start with a $1 billion investment and should be up and running by 2026.
Apple has not yet commented on the matter. Last year, the company first proposed investing $10 million, which was later raised to $100 million. However, officials said these amounts were too low considering Apple’s sales in Indonesia. Although Apple runs four developer academies in the country, it does not have a manufacturing plant there.
Indonesia, the fourth-largest country by population, has often used trade rules to attract foreign investment, taking advantage of its huge consumer market.
The country has more mobile phones (354 million) than people (280 million). The local content rules have often been criticised by businesses, calling them ‘protectionist’ in response to the American Chamber of Commerce in Indonesia’s contention that these rules are ”very challenging” for foreign firms, especially in sectors in which locally made components are hardly available.
