In a significant development, Indonesia’s Investment Minister, Rosan Roeslani, revealed that Apple has pledged a US$1 billion investment in the country. This announcement, made during a session with local lawmakers, represents a critical step forward in resolving Apple’s ongoing challenges in Southeast Asia’s largest economy. Earlier Indonesia stopped Apple from importing iPhone 16 and Watch 10 into the country due to non-compliance with the country’s Domestic Component Level requirements. This law mandates that 40% of the components used in electronic devices be sourced or manufactured locally.
Indonesia’s high stakes negotiation
While Apple had initially committed US$ 107 million toward R&D facilities and developer academies in Indonesia, the government deemed the contribution insufficient, prompting a nationwide ban on its latest products. Investment Minister Roeslani underscored the importance of fairness in the deal, stating, “Whoever benefits from the sales must invest here, create jobs here.” Apple’s latest commitment represents a tenfold increase over its prior US$ 100 million offer, following negotiations that emphasized Indonesia’s desire for a deal that surpasses the tech giant’s US$ 15 billion investments in Vietnam.
Manufacturing: game-changer for Indonesia’s economy
Industry Minister Agus Gumiwang Kartasasmita highlighted the transformative potential of Apple manufacturing its devices locally. He noted that such a move could stimulate a ripple effect across various sectors, attract supplier investments, and create significant employment opportunities. With a burgeoning tech-savvy population, Indonesia represents a critical growth market for Apple, boasting over 350 million active mobile phones—far exceeding its population of 270 million.
Indonesia’s aggressive investment strategy
Indonesia’s recent push for greater investment aligns with President Prabowo Subianto’s goal of achieving 8% economic growth during his term. By enforcing stricter investment policies, the government has successfully lured global players to support local industries. Examples include TikTok’s restructuring of its shopping business and bans on raw nickel exports to encourage domestic processing. Minister Roeslani anticipates a formal written commitment from Apple next week, potentially paving the way for the ban to be lifted. If Apple follows through with its investment, Indonesia could emerge as a key hub in the tech giant’s global supply chain.
Via: amongst others Bloomberg
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