Indonesia is maintaining its ban on Apple’s iPhone 16, declaring that the US tech giant’s $1bn investment proposal to build an AirTag manufacturing facility is insufficient to meet the country’s strict local content regulations. According to a report by the Financial Times, the government of President Prabowo Subianto imposed the ban in October after Apple failed to comply with a rule mandating that 40% of components in smartphones and tablets be sourced locally. Google’s Pixel phones have also been affected by the same regulation.
Industry Minister Agus Gumiwang Kartasasmita announced on Wednesday that the Ministry of Industry had no basis to issue the necessary local content certificate for Apple products, particularly the iPhone 16. He stated that Apple’s investment offer was “not enough” to meet Indonesia’s demands. The proposal includes a $1bn plant to manufacture AirTags, expected to begin operations by 2026, but government officials clarified that such a facility would not contribute toward meeting local content requirements for smartphones.
Apple’s earlier offers of $10mn and then $100mn were also dismissed by Indonesian officials as too small compared to the company’s revenue from sales in the country. While Apple operates four developer academies in Indonesia to train students and engineers to create applications, it has no manufacturing presence in the nation. With 354 million active mobile phones—far exceeding Indonesia’s population of about 280 million—the government is leveraging its massive consumer base to push for greater foreign investment.
Indonesia’s trade policies, including local content regulations, are designed to attract onshore manufacturing and protect domestic industries. However, the Financial Times noted that some businesses have criticized these rules as protectionist, arguing they deter foreign investment. The American Chamber of Commerce in Indonesia has pointed out that meeting local content requirements is particularly challenging in industries like electronics where domestic components are scarce.
Critics warn that bans on products from major players like Apple and Google could hurt Indonesia’s appeal to foreign investors. Economists have highlighted the risk of losing out to regional competitors like Vietnam and Malaysia, which are perceived as having more investment-friendly environments. Apple executives are currently in Jakarta for discussions with the government, but it remains uncertain whether the company can resolve the standoff as Indonesia continues to prioritize local content regulations over global product availability.
