Indonesia is expected to receive a US$1 billion investment commitment from technology company Apple within a week, the Investment Minister said on Tuesday (Dec 3). This commitment follows the policy banning the sale of the iPhone 16 for failing to meet domestic component level (TKDN) requirements.
During a parliamentary hearing on Tuesday, Investment Minister Rosan Roeslani revealed that the government would soon meet with Apple representatives to secure the investment commitment.
Rosan told lawmakers that this investment is the first phase of a larger plan. He added that Apple will submit a written commitment letter within a week.
If the proposal is approved, the investment value will increase significantly, rising tenfold from the previous proposal of US$100 million (Rp1.5 trillion).
Indonesia Pushes for Bigger Apple Investment
Initially, Apple proposed a US$10 million (approximately Rp155 billion) investment to build an accessories and components factory in Bandung, near Jakarta. However, the government rejected the proposal, citing concerns about fairness.
During a hearing, Rosan explained that the government expected a larger investment if Apple included Indonesia in its global supply chain. He also emphasized the government's desire for Apple to invest more than in Vietnam, where the company has invested about US$15 billion (Rp233 trillion) in manufacturing facilities.
With a young, tech-savvy population and a US$1 trillion economy, Indonesia represents a promising market for Apple, with more than 350 million active mobile phones.
Indonesia Enforces Strict Investment Rules
The Indonesian government banned the sale of the iPhone 16 because Apple did not meet the country's local content requirement (TKDN). This requirement mandates that at least 40% of the components in electronic devices sold in Indonesia must be produced locally.
Meanwhile, Apple's failure to meet its investment commitments has raised questions about the company's seriousness about doing business in Indonesia. In 2023, Apple pledged to invest Rp 1.7 trillion to develop a developer academy in Indonesia. However, the company failed to meet about 10% of the target.
Indonesia is known for its strict policies aimed at encouraging global investment while protecting domestic industries. For example, it required TikTok to separate its shopping function and banned the export of raw materials to encourage domestic mineral processing.
The push for investment has intensified under the leadership of President Prabowo Subianto, who is targeting 8% economic growth.
