Reasons Behind Prabowo's Chosen Ministry of Industry's Rejection of Apple's IDR 1.5 Trillion Investment Proposal

The Indonesian Ministry of Industry (Kemenperin) has firmly rejected Apple's investment proposal worth $100 million (approximately IDR 1.5 trillion). The rejection was due to the proposal not meeting the principles of fairness in investment. As a result, the official launch of the iPhone 16 series in Indonesia remains uncertain for the time being.

Minister of Industry Agus Gumiwang Kartasasmita revealed the reasons behind the rejection. According to him, Apple has not met four key aspects that are considered essential for fair investment in Indonesia. The first aspect concerns the comparison of Apple’s investments in other countries. “Currently, Apple has not made any investments in production facilities or factories in Indonesia,” he stated in a written statement on Saturday (November 30, 2024).

In addition to this, there are several other factors that contributed to the rejection. Second, Kemenperin pointed out that other Hong Kong-based technology brands (HKT) have made more significant investments in Indonesia. Third, Apple has not sufficiently contributed to creating added value and boosting state revenue. Lastly, Apple has not created enough job opportunities in Indonesia. Following a leadership meeting on Monday (November 25, 2024), it was decided that Apple would need to increase its investment in line with these fairness principles.

Although the new investment proposal was rejected, Kemenperin has insisted that Apple fulfill its remaining investment commitments for 2023. These commitments will not be discussed as part of the new proposal. “The new proposal discussions will only apply to Apple’s investment obligations for the 2024-2026 period, which are related to obtaining the Domestic Component Level (TKDN) certification,” Agus added.

Kemenperin also reminded Apple that it is required to review its investment proposals every three years, based on the chosen investment scheme to obtain TKDN certification. In the near future, Kemenperin, through the Directorate General of ILMATE, will invite Apple representatives to discuss the settlement of the 2023 investment commitments and the new proposal for 2024-2026.

Furthermore, Kemenperin suggested that Apple consider establishing production facilities or factories in Indonesia as soon as possible, to avoid the need for submitting investment proposals every three years. This recommendation aligns with Kemenperin’s ongoing efforts to revise Ministry of Industry Regulation (Permenperin) No. 29 of 2017, which governs the calculation of the Domestic Component Level (TKDN) for mobile phones, handheld computers, and tablet devices. The revision is intended to adapt to the changing landscape of the technology industry in Indonesia and reinforce the principles of fair investment.