Indonesia is anticipated to receive a $1 billion investment commitment from technology company Apple inside every week, the Minister of Investment announced on Tuesday (Dec 3). This commitment is according to the policy prohibiting the sale of iPhone 16 as a consequence of failure to satisfy domestic component level (TKDN) requirements.
During Tuesday’s parliamentary hearing, Investment Minister Rosan Roeslani revealed that the federal government would soon meet with Apple representatives to secure an investment commitment.
Rosan told lawmakers the investment represents the primary phase of a bigger plan. He added that Apple will submit a written commitment inside every week.
If the proposal is approved, the investment value will increase significantly, tenfold from the previous proposal of $100 million (R1.5 trillion).
Indonesia is pushing for more investment from Apple
Initially, Apple proposed an investment of $10 million (about 155 billion rupiah) to construct an accessories and components factory in Bandung near Jakarta. However, the federal government rejected the proposal, citing fairness concerns.
During the hearing, Rosan explained that the federal government expected more investment if Apple included Indonesia in its global supply chain. He also highlighted the federal government’s desire for Apple to speculate greater than in Vietnam, where the corporate has invested about $15 billion (Rp233 trillion) in manufacturing plants.
With a young, tech-savvy population and a $1 trillion economy, Indonesia is a promising marketplace for Apple, with greater than 350 million lively mobile phones.
Indonesia enforces strict investment rules
The Indonesian government banned the sale of the iPhone 16 because Apple failed to satisfy the country’s Local Content Disclaimer (TKDN) requirements. This requirement states that at the least 40% of electronic device components sold in Indonesia have to be produced locally.
Meanwhile, Apple’s failure to satisfy its investment commitments has raised questions on whether the corporate is serious about doing business in Indonesia. In 2023, Apple pledged to speculate 1.7 trillion rupiah to develop developer academies in Indonesia. However, the corporate failed to realize roughly 10% of its goal.
Indonesia is thought for its strict policies geared toward encouraging global investment while protecting domestic industries. For example, it required TikTok to segregate its purchasing function and banned the export of raw materials to encourage domestic mineral processing.
The push for investment has intensified under President Prabowo Subianto, who has set a goal of 8% economic growth.
