Indonesia is expecting a significant investment commitment from tech firm Apple Inc. within the next week, with an estimated value of $1 billion. This follows the country’s ban on sales of iPhone 16 due to non-compliance with local content rules.
The Indonesian government had previously banned the sale of the smartphone after it failed to meet the requirement of at least 40% locally-made parts. The country plans to increase this threshold in the future.
Investment Minister Rosan Roeslani stated that Indonesia expects more investment from Apple if it decides to make the country part of its supply chain. According to Rosan, “whoever benefits from the sales must invest here, create jobs here.” This implies that Apple’s presence in Indonesia could lead to increased local manufacturing and job creation.
Apple had previously proposed a $100 million investment to build an accessory and component plant in Indonesia, but the government rejected it citing non-compliance with fairness principles. However, Apple has set up application developer academies since 2018, which Indonesia considers as an attempt to meet local content requirements for older iPhone models.
This development highlights the importance of local content requirements for tech companies operating in Indonesia. Companies typically increase local composition through partnerships or sourcing parts domestically. The expected $1 billion investment commitment from Apple could mark a significant shift in the company’s strategy for doing business in the country.
Source: https://www.reuters.com/technology/indonesia-expects-1-bln-investment-commitment-apple-a-week-minister-says-2024-12-03