Indonesia to raise local component requirement for smartphones

Indonesia plans to raise the local component requirement for smartphones manufactured and sold in the country to boost the domestic manufacturing sector, Deputy Industry Minister Faisol Reza announced on Tuesday.

The decision follows Indonesia’s ban on Apple’s iPhone 16 last month due to its failure to meet the existing 40 per cent local component requirement.

Apple has since proposed a $100 million investment to build an accessory and component plant in Indonesia, but the government has rejected this proposal, citing fairness concerns.

While specific details and timelines for the new regulations are still under discussion, the government’s goal is to strengthen the domestic industry. The government is considering whether investments in research and development could be counted towards fulfilling the local content requirement.

Apple, which currently has no manufacturing facilities in Indonesia, has established application developer academies since 2018. These academies were seen as a strategy to meet the local content requirement for older iPhone models.

Attribution: Reuters

Subediting: M. S. Salama