Jakarta, Indonesia Sentinel — Indonesia’s Ministry of Industry (Kemenperin) has turned down Apple $100 million investment proposal for the 2024-2026 period, stating it fails to meet the country’s fairness principles. The proposed investment, equivalent to approximately Rp1.58 trillion was linked to Apple’s effort to lift a ban on the sale of its iPhone 16 series in the Indonesian market.
Apple had initially proposed a $10 million investment but later raised the offer tenfold to $100 million. However, Minister of Industry Agus Gumiwang announced that the revised proposal still fell short of expectations and fail to meet the fairness principle.
“A $100 million investment, based on a technocratic assessment, does not satisfy the principle of fairness,” Agus said on Monday, November 25.
Agus outlined four fairness principles that Apple must meet to invest in Indonesia.
1. Comparable Investment Value
Apple’s investment in Indonesia should match its commitments in other peer countries. However, the Ministry of Industry did not provide specific comparisons.
According to Kompas, Apple has invested approximately 400 trillion Vietnamese dong (around Rp255 trillion) in Vietnam. By comparison, Apple’s proposed Rp1.58 trillion investment in Indonesia is significantly lower.
2. Equal with Competitors
Apple’s investment should also align with those made by other electronics manufacturers. Samsung, for example, has invested Rp8 trillion in Indonesia, while Xiaomi has committed Rp5 trillion. Furthermore, Apple has yet to establish any production facilities or factories in the country.
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3. Economic Value Creation
The investment should enhance Indonesia’s economic value, including state revenue from imports. According to Agus, Apple’s proposal does not yet meet the government’s expectations in this area.
4. Job Creation
Apple must demonstrate a meaningful contribution to domestic job creation as part of its investment.
“Based on our technocratic assessment, the current proposal does not meet the fairness criteria we have set,” Agus reiterated.
Ongoing Negotiations and Past Commitments
Agus added that the government through the Ministry’s Director General of Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) would summon Apple representatives for further discussions on the next investment period.
Beside renegotiating for the new investment, the ministry also highlighted outstanding commitments from Apple’s previous investment period (2020-2023). Apple had pledged $108 million (Rp1.7 trillion) but has so far delivered only Rp1.4 trillion, leaving an outstanding of around Rp271 billion.
The government hope that Apple would propose a significantly larger investment than $100 million for the next period. Until then, the ban on iPhone 16 series sales in Indonesia remains in effect.
(Raidi/Agung)
