Indonesia Awaits $1 Billion Investment from Apple

JAKARTA (Reuters) – Indonesia expects a $1 billion investment commitment from tech giant Apple Inc (NASDAQ:AAPL) within a week, as stated by the nation's investment minister on Tuesday. This anticipation comes after the Indonesian government banned iPhone 16 sales for not complying with local content regulations.

Local Content Rules

Indonesia halted the sales of the smartphone due to its requirement that at least 40% of parts sold domestically be locally made, a condition Apple allegedly did not meet. The government plans to raise this requirement, according to a deputy minister.

Investment Minister Rosan Roeslani told lawmakers that more investment could follow if Apple incorporates Indonesia into its supply chain. "Whoever benefits from the sales must invest here, create jobs here," Rosan emphasized, adding that the investment commitment is part of a phased approach.

Previous Investment Proposals

Earlier, Apple proposed a $100 million investment to establish an accessory and component plant in Indonesia to lift the ban, but the government rejected that proposal, citing issues regarding fairness.

Despite lacking manufacturing facilities in Indonesia, which has a population of about 280 million, Apple has initiated developer academies since 2018. The government views this strategy as an effort to meet local content requirements for older iPhone models.

Local Partnerships

Typically, companies boost their local content compliance through partnerships or by sourcing parts domestically.