The ongoing clash between Apple and the Indonesian government shows no signs of resolution. In the latest development, the Ministry of Industry has rejected Apple’s investment proposal of $100 million (Rp 1.58 trillion), which was aimed at gaining approval to sell the iPhone 16 in Indonesia. According to the Ministry, the offer lacks fairness when compared to the significantly larger investments made by other tech giants such as Samsung and Xiaomi.
Currently, Apple is barred from selling the iPhone 16 in Indonesia due to its failure to meet a three-year investment commitment. This obligation had initially allowed Apple to be the only company authorized to import smartphones into the country.
However, the company has yet to fulfill its prior investment commitments, prompting the Ministry of Industry to withhold the crucial Domestic Content Certification (TKDN) required for iPhone 16 sales.
Instead of addressing its previous shortfall, Apple submitted a new investment proposal worth $100 million, a move that did not sit well with government officials.
“We had a meeting today based on a highly technocratic approach with comprehensive calculations. Regarding Apple’s investment proposal of $100 million in Indonesia, the amount does not align with what we consider fair,” stated Agus Gumiwang, the Minister of Industry, during a press conference on Monday (November 25, 2024).
Agus outlined four key criteria that the Ministry uses to determine fairness. The first is related to Apple’s investment activities in other countries like Vietnam, where the company has established manufacturing plants.
The second involves comparing Apple’s proposal with investments from other major manufacturers in Indonesia. For example, Samsung has invested Rp 8 trillion, while Xiaomi has committed Rp 5.5 trillion.
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Other factors include the added value and revenue generated for the state through imports, and the extent to which a company contributes to local job creation. “These are the fairness principles we are currently defining,” Agus explained.
Although Agus refrained from disclosing a specific figure deemed fair, he indicated that the government has already arrived at an appropriate benchmark.
The proposed investment for the 2024-2026 period will be further discussed with the Directorate General of Electronics and Machinery Industries. Officials are urging Apple to consider building manufacturing facilities as part of its investment plan.
During the briefing, Agus also reiterated Apple’s obligation to settle a previous $10 million investment commitment. Fulfilling this requirement, he said, would pave the way for iPhone 16 sales in Indonesia.
“If they settle this commitment, the iPhone 16 can be released. However, the 2024-2026 proposal they submitted does not yet meet the fairness principle,” Agus emphasized.
The government’s firm stance underscores its commitment to ensuring equitable treatment for all market players. It remains to be seen whether Apple will adjust its strategy to meet these expectations and secure its position in the Indonesian market.
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