The Ministry of Industry (Kemenperin) has reiterated the importance of meeting the Domestic Content Level (TKDN) requirements as a condition for Apple to sell its products in Indonesia.
This statement follows Apple’s recent proposal to invest $100 million, which is equivalent to approximately Rp 1.58 trillion.
Spokesperson for Kemenperin, Febri Hendri Antoni Arif, explained that the TKDN requirements are regulated under Minister of Industry Regulation (Permenperin) No. 29 of 2017. This regulation outlines three schemes for meeting TKDN: domestic production or factory establishment, local application development, and/or local innovation initiatives.
"Apple previously chose the innovation scheme by establishing Apple Academies in BSD Tangerang, Batam, and Surabaya. However, the plan to build an additional Apple Academy has yet to materialize," Febri stated in a press release on November 21, 2024.
Minister of Industry Agus Gumiwang Kartasasmita previously announced that the iPhone 16 series cannot yet be sold in Indonesia due to Apple’s failure to meet the required TKDN, adding that Apple still needs to cover a gap of around Rp 240 billion to reach the 40% minimum TKDN threshold.
Febri stated that TKDN would create fairness for all investors operating in Indonesia, while also adding value and deepening the structure of the domestic industry.
In addition, it ensures fairness with other countries where Apple invests and markets its products.
"So, the issue is not only about the amount or value of the investment but also about ensuring fairness for all investors in Indonesia, as well as between Indonesia and other countries," he explained.
"This is what will contribute to creating a conducive business climate for Indonesia," he concluded.
Moreover, it aligns with policies in other countries where Apple operates and invests.
"Apple's sales in Indonesia reached 2.61 million units in 2023, making it the largest market in Southeast Asia. However, the company’s investment value remains disproportionate to its contribution to the national economy," he noted.
This statement clarified Agus's statement, who stated that in 2023, the U.S.-based manufacturer generated over Rp 30 trillion in revenue.
This figure comes solely from the sales of mobile phones, handheld computers, and tablets.
Kemenperin has put forward three additional requirements for Apple:
- Establishing a research and development (R&D) division in Indonesia, distinct from the Apple Academy scale.
- Involving local companies in Apple’s global supply chain.
- Bridging the investment gap to meet the 40% TKDN requirement.
On November 18, 2024, Apple responded by submitting an investment proposal worth $100 million for a two-year period.
This figure marks a significant increase from its initial plan of $10 million. The proposal includes plans to build a manufacturing facility in Bandung, West Java.
Kemenperin has responded swiftly to the proposal, holding a leadership meeting on November 21, 2024.
Minister of Industry Agus Gumiwang Kartasasmita welcomed Apple’s commitment, expressing hope that it will strengthen industrial collaboration and contribute to a competitive and sustainable digital economy in Indonesia.
But the government still denied Apple.
The Indonesian government said that it's still banning the sales of the iPhone 16 due to Apple’s failure to meet the required TKDN.
Since its global launch in September, the iPhone 16 has yet to enter the Indonesian market due to these regulatory hurdles. Because of this, later, Apple ramped up its number.
The news was delivered by Investment Minister and Head of the Investment Coordinating Board (BKPM), Rosan Roeslani, who announced Apple has committed into making an initial investment of $1 billion (Rp 15.9 trillion) in Indonesia. The minister revealed this during a meeting with Commission XII of the Indonesian House of Representatives at the parliament building in Senayan, Jakarta, on Tuesday.
"I have received a written commitment for the first phase of $1 billion. Hopefully, this week, I can finalize the details and hand them over to the Industry Ministry," he stated.
This substantial commitment marks a significant increase from Apple’s earlier proposal of $100 million.