Indonesia Bans Apple Over Local Component Rules

Indonesia has rejected Apple’s proposed $100 million investment plan to lift a sales ban on the iPhone 16. The Southeast Asian nation imposed the ban in October. Indonesia cited Apple’s failure to meet local content requirements mandating 40% domestic components in smartphones and tablets. Industry Minister Agus Gumiwang Kartasasmita stated the investment proposal fell short compared to Apple’s contributions in other countries.

Apple’s proposal included building a factory in Bandung in partnership with its suppliers. This facility would produce accessories and components for Apple’s products. The tech giant also planned to invest an additional $10 million to make more goods locally. However, it failed to sway Indonesian authorities. Kartasasmita emphasized the need for Apple to establish permanent manufacturing facilities rather than offering temporary solutions every three years.

Apple sales ban in Indonesia does not affect personal use

Despite the sales ban, Indonesians can still bring iPhone 16 units into the country for personal use, as long as they are not sold commercially. The government estimates approximately 9,000 units have entered through such channels. However, Apple’s inability to meet regulatory requirements mirrors challenges faced by other tech giants. Indonesia has also banned Google Pixel phones for similar reasons, though about 22,000 units of those devices have entered the country unofficially this year.

The sales ban highlights Indonesia’s push to protect local industries and boost manufacturing investments. President Prabowo Subianto’s administration aims to create a level playing field, urging multinational companies to contribute more significantly to the domestic economy. This policy aligns with broader efforts to reduce reliance on imports and foster technological development within the country.

Apple’s struggles in Indonesia could impact its growth strategy in Southeast Asia’s largest market. While the government deliberates on the latest proposal, Apple’s reluctance to build production facilities locally may delay any resolution. The outcome of this standoff will likely shape the tech giant’s future in Indonesia, where market access depends increasingly on meeting stringent local content rules.