According to Reuters Apple continues to face restrictions on selling its iPhone 16 in Indonesia, despite having struck a deal to establish a local production facility in the country. The issue, according to Indonesia’s Industry Minister Agus Gumiwang Kartasasmita, lies in Apple’s failure to meet the government’s domestic content requirements.
Apple's struggle with local content rules
Last year, Indonesia imposed a ban on the sale of Apple’s iPhone 16, as the company had not met the government's stipulation that smartphones sold domestically must contain at least 40% locally-made parts. This requirement is part of Indonesia's broader effort to stimulate local manufacturing and reduce reliance on foreign imports.
Investment deal and local production facility
Apple has recently reached an agreement to build a facility on Batam Island, which is close to Singapore. The factory, primarily aimed at producing Apple’s Airtag tracking devices, is expected to boost the company’s investment in the region. However, the production of Airtags does not fulfill the local content requirements for iPhone 16, as the government only recognizes components related directly to smartphones.
No local content certification for Apple iPhone 16
Minister Kartasasmita clarified that the local production facility would not provide Apple with the necessary certification to sell the Apple iPhone 16 in Indonesia. While the factory will help Apple invest in the region, it does not directly contribute to the production of smartphone parts, which are central to meeting Indonesia’s regulatory standards for local content.
US$1 billion investment and future prospects
The Indonesian government’s investment minister highlighted the substantial nature of the deal, which is expected to be worth around $1 billion. The new facility is slated to begin operations in 2026, representing a significant step forward in Apple’s relationship with Indonesia. Despite the potential for local job creation and economic growth, the company will have to meet local content requirements before it can resume selling the iPhone 16.
Apple's ongoing negotiations with Indonesia
During two days of meetings with Apple’s vice president of global government affairs, Nick Ammann, Minister Kartasasmita discussed proposals for “innovative investment” that would benefit both Apple and Indonesia. However, the issue of meeting local content requirements remains a hurdle for Apple in its efforts to regain access to the Indonesian smartphone market.
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