Indonesia tightens smartphone local component rules after Apple ban

Indonesia has recently confronted Apple regarding the local content requirements for smartphone manufacturing in the country. After Indonesia mandated that smartphones sold domestically must consist of at least 40% locally manufactured parts, sales of the iPhone 16 were banned due to Apple's failure to comply. This move was further escalated in November 2024 when Indonesian authorities confiscated and destroyed recent iPhone models that did not meet these local content regulations. In light of the restrictions, Apple has proposed significant investments, including a $100 million proposal aimed at building an accessory and component plant. However, this proposal was rejected by the government as it did not align with their principles of fairness. The Indonesian government seeks to enhance its domestic manufacturing sector by increasing the requirements for local components in smartphones, a strategy aimed at strengthening national industries and encouraging foreign companies to invest locally. Apple's long-standing strategy involved setting up application developer academies in Indonesia since 2018, which Jakarta considered as an effort to fulfill local content requirements for older iPhone models. Currently, the Indonesian government, through Deputy Minister Faisol Reza, is exploring the potential for further discussions with Apple's representatives to find a viable solution that satisfies both parties while bolstering the country's manufacturing capabilities. As discussions progress, the government has not yet established a clear timeline for enforcing the new requirements on local components for smartphones.