In its most recent attempt to lift the iPhone ban on the sale of iPhone 16 devices in the largest economy in Southeast Asia, Indonesia announced that it had received a better investment offer from Apple for US$1 billion (S$1.34 billion).

Investment Minister Rosan Roeslani informed MPs on December 3 that the Indonesian government and Apple have agreed on the amount as a “first phase” of expenditure and that he anticipates receiving a formal commitment letter from the firm within a week.

“Fairness is what we want to see,” Mr. Roeslani stated. “Here, you gain advantages. You make investments here and generate employment. That would be ten times more than Apple’s previous offer of US$100 million if confirmed.

According to a previous story by Bloomberg News, its initial proposal was a far lower US$10 million for a facility that produced components and accessories in the city of Bandung, which is located just outside the capital Jakarta.

Apple’s flagship iPhone 16 devices were banned from sale in Indonesia because of noncompliance with domestic content regulations for smartphones and tablets.

Despite its 2023 commitment to invest 1.7 trillion rupiah (S$143.4 million) in developer academies around Indonesia, the Cupertino, California-based corporation had fallen short by about US$10 million.

The government had previously demanded that Apple provide Indonesia with a better deal than Vietnam, where it has invested almost US$15 billion in manufacturing facilities. Mr. Roeslani reiterated this demand.

“They must have made a larger investment,” he stated.

In November, Industry Minister Agus Gumiwang Kartasasmita, whose office had banned the iPhone 16, stated that he wanted Apple to create a local plant, like other phone manufacturers like Xiaomi and Samsung Electronics.

According to Mr. Roeslani, if Apple were to manufacture its gadgets locally, it would generate additional jobs and investments in associated industries. He stated, “The global value chain will shift to us, and that is the most important thing.”

In order to attract more investment and safeguard its own sector, Indonesia has a history of playing hardball with businesses. In an effort to protect its retail industry from low-cost Chinese goods, the government has compelled ByteDance’s TikTok to separate its shopping function from its social media platform.

In order to encourage businesses to process minerals onshore and build local battery manufacturers, it has also prohibited the export of raw materials like nickel.

The increased drive for investment coincides with President Prabowo Subianto’s goal of achieving 8% economic growth throughout his five-year term. Due to declining industry activity and consumption, the GDP grew at its slowest rate in a year last quarter, at just 4.95 percent.

With a young, tech-savvy populace, Indonesia presents a potential development opportunity for Apple. According to government figures, the US economy, worth $1 trillion, has more than 350 million active mobile phones, more than the country’s 270 million inhabitants.

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