Indonesia to increase local component requirement for smartphones

Indonesia plans to increase requirements on local components for smartphones made and sold in the country, its deputy industry minister said on Tuesday, a move aimed at boosting the domestic manufacturing sector.

The plan follows Indonesia’s banning last month of sales of Apple’s iPhone 16 after it failed to meet a requirement that smartphones sold domestically must comprise at least 40% locally-made parts.

Apple has since made a $100 million investment proposal to build an accessory and component plant to reverse the ban, but the government has rejected that on the grounds it did not meet the principal of fairness.

Apple has not responded to Reuters requests for comment on the issue.

Deputy Minister Faisol Reza said the government was still discussing the details and gave no timeframe for the introduction of the plan, or by how much the ratio of local components would increase.

“What important is that the goal is to strengthen our domestic industry,” he told reporters.

The government was looking at whether investment into research and development was relevant and could be counted as a component in fulfilling the local content rule. Apple has no manufacturing facilities in Indonesia but has since 2018 set up application developer academies, which Jakarta considers the company’s strategy to meet local content requirement for the sale of older iPhone models.

Minister Faisol said Apple’s representatives will meet with the government soon to discuss a solution.