Apple faced trouble with the Indonesian government last month when they banned the new iPhone 16 series. This happened because Apple didn’t meet its promised investment in the country. Apple first offered to invest $10 million, then raised it to $100 million, matching its original pledge of IDR 1.71 trillion ($109 million) for local R&D facilities. However, the Indonesian government is now unhappy with these amounts and wants more.
Indonesia wants Apple to invest over $100 million in the Local Industry
A new report says Apple’s latest investment offer isn’t enough. Indonesia’s Industry Ministry, led by Minister Agus Gumiwang Kartasasmita, turned it down during a meeting. The government wants Apple to invest more money and include Indonesia in its global supply chain.
“From the government’s perspective, of course, we want this investment to be larger. A larger investment will ease the development of Indonesia’s domestic manufacturing sector. It will help the country to become a part of Apple’s global supply chain. – Febri Hendri Antoni Arif, ministry spokesperson.”
Gizchina News of the week
In Indonesia, foreign companies must follow the TKDN rules, which say 4% of their products must be made locally to do business there. They can meet this rule by making products in Indonesia, creating software locally, or setting up research and development (R&D) centers.
Apple promised to spend IDR 1.71 trillion ($109 million) on local research and development in Indonesia. But so far, they’ve only spent IDR 1.48 trillion ($95 million). The company is thinking about expanding its accessories and components in Indonesia because that’s what the government seems to want. Since Apple failed to comply with the original investment, the government banned the iPhone 16 series and Apple Watch 10 series in the country.
Arif, a government representative, said that Indonesia’s local industry can supply Apple with items like chargers and accessories.
“We can’t make semiconductors yet, but if Apple needs them, they can get parts from local suppliers,” he said. “We’re happy to help with this. It would create more jobs and have a big impact on Indonesia’s economy.”
The Indonesian government also asked the iPhone maker to set up a research and development center for Industry 4.0. This center would focus on creating and improving artificial intelligence technology.
For now, we don’t know exactly how this case will evolve. One thing we know: Apple will need to raise its efforts if it plans to sell iPhone 16 models in Indonesia.