Apple finds itself in a regulatory bind in Indonesia, as the government has banned the sale of its iPhone 16 for failing to meet the country’s local content requirement. Under Indonesian law, at least 40% of components in electronic devices sold in the country must be locally sourced or produced.
To resolve the issue, Indonesia’s Minister of Industry, Agus Gumiwang Kartasasmita, met with Apple representatives to discuss a potential investment that could meet the regulatory standards. While specifics of the negotiations remain undisclosed, Agus hinted that Apple might need to significantly increase its local commitments.
Currently, Apple has no manufacturing facilities in Indonesia, relying instead on its app development academies established since 2018 to partially meet local requirements. However, the ban has put pressure on the tech giant to consider setting up a manufacturing plant in the country.
Reports from 2024 indicated that Apple had previously offered a $1 billion investment proposal to lift the ban, but government officials deemed it insufficient. The situation underscores the challenges multinational companies face in navigating local regulations while maintaining global supply chains.
If successful, a new manufacturing plant in Indonesia could not only resolve the iPhone 16 ban but also strengthen Apple’s position in the rapidly growing Southeast Asian market.
