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Indonesia’s Ministry of Industry has dismissed Apple’s proposed $1 billion investment in local manufacturing as insufficient to overturn its ban on iPhone 16 sales.

The rejection comes as President Prabowo Subianto’s government maintains its stringent stance on local content requirements, which mandate that 40% of components in mobile devices be sourced domestically as part of the Domestic Component Level (TKDN) certification.

Industry Minister Agus Gumiwang Kartasasmita told reporters in Jakarta on Wednesday that the American technology giant’s proposal to establish an AirTag manufacturing facility would not satisfy the local content threshold for its flagship smartphone. “The Ministry of Industry does not have the basis to issue the local content certificate for Apple products, especially the iPhone 16,” he said.

Investment Minister Rosan Roeslani had earlier revealed that Apple committed to developing an AirTag facility slated for operation by early 2026. The announcement followed previous proposals from Apple, which began at a modest $10 million before rising to $100 million—figures Indonesian officials deemed inadequate given the company’s substantial market presence in the archipelago.

The American Chamber of Commerce in Indonesia has highlighted the challenges foreign companies face in meeting local content requirements, particularly in sectors such as electronics where domestic supply chains remain underdeveloped.

Home to 354 million mobile connections, and with over half of its 278 million-large population aged under 44, Indonesia has been increasingly assertive in leveraging its considerable consumer market to attract meaningful foreign investment. 

This policy could diminish Indonesia’s competitive position against regional manufacturing hubs such as Vietnam and Malaysia.

Nonetheless, the ban, which also affects Google’s Pixel devices, represents Indonesia’s capability to extract concessions from global technology companies eager to access its vast consumer base.