Indonesia will continue to ban local sales of the iPhone 16, saying that Apple’s $1-billion investment plan that includes building an AirTag factory is insufficient to meet local content requirements.
Domestic content rules require Apple to produce parts of its smartphones or components onshore, while the AirTag is only an accessory, Industry Minister Agus Gumiwang Kartasasmita said on Wednesday.
“As of this afternoon, the government does not have a basis for issuing the local content certificates” that Apple needs to sell its flagship device in Indonesia, he said. “Apple needs to negotiate with us so that we can issue a certificate.”
Apple could be sanctioned for continued non-compliance with local investment rules, though that would be the government’s last resort. “We will look for other ways or options,” he said, adding that the government has already sent a counterproposal to Apple.
Apple has proposed to build a factory on Batam island, close to Singapore, by early 2026 and start making AirTags, devices that allows users to track luggage, pets or other belongings, according to Investment Minister Rosan Roeslani.
Under Indonesian government regulations, smartphones sold domestically should contain at least 35% locally made parts.
Agus, who held two days of meetings with Nick Ammann, Apple’s vice-president of government affairs, said the company had proposed an “innovative investment” which Indonesia had countered.
Apple currently has no manufacturing facilities in Indonesia, a country of 280 million people, but has since 2018 set up application developer academies.