By Kimberley Kao


Indonesia's industry ministry is pushing Apple to meet local investment requirements, saying that more of the U.S. tech giant's products could face restrictions in the country if it fails to do so.

Sales of Apple's iPhone 16 series were banned in the Southeast Asian country in October. Apple executives visited Indonesia earlier this month to continue discussions to lift the iPhone 16 ban.

Part of the talks included a proposal from Apple to build a $1 billion factory to produce its AirTag tracking devices in Batam. But the industry ministry said then that the proposal wouldn't fulfill the requirements needed to certify Apple to start selling its iPhone 16 handsets again.

Industry ministry spokesperson Febri Hendri Antoni Arif said Wednesday that based on the ministry's calculations, which only include the cost of land, buildings, machinery and technology purchases, the factory's "real investment value" is only $200 million.

"This value is certainly much smaller compared to the $1 billion investment value in the proposal submitted by Apple to us," Febri said.

Despite ongoing negotiations, Febri said the company remains noncompliant.

Apple still has an investment commitment debt of $10 million that was due in June 2023, the industry ministry said. The ministry has therefore imposed what it called the "lightest possible sanction" of an additional investment capital requirement on Apple.

Febri said this was communicated to Apple during the talks but the ministry has yet to receive a revised offer.

"But if Apple still does not comply, we will consider heavier sanctions," Febri said.

Apple didn't respond to a request for comment.

However, a Bloomberg report on Wednesday citing an interview with Indonesia Investment Minister Rosan Roeslani said that the official had met with Apple recently, and that the parties could potentially be close to reaching a deal that may include resolving the iPhone ban.

The investment ministry didn't immediately respond to a request for comment.

The iPhone 16 ban is tied to an Indonesian policy aimed at supporting domestic industries and reducing dependence on imported products. Under the policy, companies have to meet set requirements for using goods or services sourced from within the country. This can be done via various means, including manufacturing products, building factories or developing innovations domestically.

Apple, which currently has no manufacturing sites in Indonesia but runs extensive operations in neighboring country Vietnam, has been under pressure by the Indonesian government on multiple fronts in recent years as it seeks to retain its market access to a fast-growing country of more than 280 million people.


Write to Kimberley Kao at kimberley.kao@wsj.com


(END) Dow Jones Newswires

01-23-25 0632ET