Indonesia Warns Apple: Sanctions Loom Over Unfulfilled Investment Promises

January 9th 2025

Credit: Antara News

In Summary:

Indonesia’s Industry Ministry has warned Apple of potential sanctions for failing to meet its investment commitment of $10 million tied to the Domestic Component Level (TKDN) certification. The certification requires companies to ensure that a portion of their products’ components is locally sourced or tied to substantial domestic investment. Apple’s current contributions, largely through its Apple Academy’s training and education initiatives, have been deemed insufficient, as they lack the required focus on research and development (R&D).

Under Article 59 of the Industry Minister's Regulation Number 29 of 2017, sanctions could include the revocation of Apple’s TKDN value, jeopardizing its ability to sell products like the iPhone 16 in the Indonesian market. While negotiations are ongoing, with Apple committing to repay its debt, the government is pushing for a long-term R&D facility in Indonesia to strengthen local innovation.

Indonesia’s stance reflects broader concerns about ensuring multinational corporations deliver proportional investments to match their market penetration. The rejection of Apple’s earlier $100 million proposal underscores the government’s firm stance on requiring investments that align directly with its manufacturing and economic priorities.

This situation highlights a growing trend in emerging markets like Indonesia demanding greater accountability and contributions from global tech giants. For Apple, a significant player in the region, balancing local regulations with global business strategies remains critical to maintaining its foothold in this fast-growing market.

Read the full article at: Antara News