Apple Proposes 1.59 Trillion IDR Investment in Indonesia, Government Seeks Larger Commitment

The Indonesian Ministry of Industry (Kemenperin) has confirmed that Apple is offering an investment of 100 million USD (approximately IDR 1.59 trillion based on an exchange rate of IDR 15,931.62) over two years in Indonesia. This investment proposal is part of Apple’s latest efforts to persuade the Indonesian government to lift the ban on the iPhone 16 in the country. The amount Apple has proposed is ten times larger than its initial plan of a 10 million USD (about IDR 158 billion) investment, which was intended for setting up an accessory and component factory in Bandung, West Java.

Despite the much larger investment offer, Kemenperin has not yet given a final approval for the proposal. The Indonesian government is hoping that Apple will offer an even higher investment than 100 million USD. This was stated by Kemenperin spokesperson, Febri Hendri Antoni Arif, who added that the Indonesian government appreciates Apple’s intention with its 100 million USD proposal, submitted on November 18, 2024.

In a meeting held on Thursday, November 21, 2024, Kemenperin discussed Apple’s investment proposal, but no final decision has been made. Febri mentioned that the government wants the investment amount to be higher, as this would have a more significant impact on the domestic manufacturing industry and strengthen Indonesia’s position in the global supply chain of the company.

Febri also added that with a larger investment, Apple would be expected to contribute to the creation of new jobs and boost Indonesia’s economy, particularly in industries supporting Apple’s products. Although semiconductor production is not yet feasible in Indonesia, components such as chargers and other accessories are expected to be manufactured domestically.

The 100 million USD investment proposal is planned to fund several projects, including the establishment of a Product Development Center and a Professional Developer Academy during 2024-2026. Additionally, Apple plans to start producing Mesh Airpods Max components in 2025 at a factory to be built in Bandung. Apple also intends to establish its fourth and fifth Apple Academies in Bali and Jakarta by June 2026.

Kemenperin is also evaluating whether the proposed investment is fair, both for Indonesia and for other investors already involved in the smartphone and technology sectors in the country. Furthermore, the government hopes that the investment will lead to greater job creation.

The government has also set several conditions for Apple to meet if the investment is to be accepted. One of these conditions is that Apple must establish a Research and Development (R&D) division in Indonesia, which would have a scope much larger than the existing Apple Academy. In addition, Apple is expected to start involving more Indonesian companies in Apple’s global supply chain.

In addition to the new investment offer, Kemenperin has also reminded Apple of its remaining obligations from its previous investment proposal. According to reports, Apple still owes an investment of IDR 271 billion for the 2020-2023 period. Febri emphasized that, until this commitment is fulfilled, Kemenperin will not issue the TKDN (Domestic Content Level) certification or TPT (Registered Importer) permits for the iPhone 16 series. However, Apple has stated in its latest proposal that it intends to settle the remaining investment from the previous period.

Febri also pointed out that, given Apple’s size and status as one of the most valuable companies globally, fulfilling this remaining investment obligation—an amount not particularly large for a company of Apple’s scale—is crucial.

With a market capitalization exceeding IDR 555 trillion and quarterly revenues of 94.9 billion USD (approximately IDR 1.51 quadrillion) in Q4 2024, Apple is seen as fully capable of meeting its commitments and continuing to invest in Indonesia.