iPhone 16 Ban Finally Lifted In Indonesia: But Where’s The Local Manufacturing?

Indonesia is set to lift its five-month ban on iPhone 16 sales after reaching a pivotal agreement with Apple. The government is preparing to sign a memorandum of understanding (MoU) with the tech giant, which could see the iPhone 16 returning to local store shelves within the week.

Dispute Over Investment Commitments

The ban, which began in October 2024, was imposed due to a dispute over Apple’s local investment commitments. Indonesia had pushed Apple to increase its financial contribution and consider local manufacturing. However, after months of negotiations, the two sides reached a deal — albeit not fully meeting Indonesia’s original demands.

No Local iPhone Production, For Now

Sources indicate that Indonesia’s Ministry for Industry will soon grant Apple the necessary permits following the MoU signing. Despite earlier reports suggesting that Apple might establish local manufacturing to satisfy Indonesia’s requirements, the company has so far opted against producing iPhones domestically. Instead, the agreement focuses on Apple’s revised investment commitments.

Initially, Apple secured an exemption from strict import quotas by promising to invest around $110 million in local development and training. However, the company fell short by about $15 million and did not meet local content rules that require 35-40% of smartphone components to be sourced domestically. While other manufacturers like Huawei have complied with these regulations, Apple remained an exception—until now.

A Billion-Dollar Investment Breakthrough

After early negotiations saw Apple’s offers of $10 million and $100 million rejected, the tech giant eventually proposed a $1 billion investment. Indonesia accepted this proposal, although with some reservations, noting that the investment is earmarked for producing AirTags rather than iPhones. While the government had sought a greater commitment to smartphone manufacturing, the deal secures significant investment and promises expanded research and development, along with enhanced training programmes.

What’s Next for Apple in Indonesia?

With the agreement nearing finalisation, Apple will proceed with its $1 billion investment plan, which includes setting up a new AirTag facility, boosting R&D centres, and launching new training initiatives. For Apple, this deal means the iPhone 16 can soon be sold in Indonesia without major changes to its production strategy. For Indonesia, the arrangement guarantees substantial investment even if local iPhone production is not part of the immediate plan.

As the MoU is expected to be signed shortly, all eyes are on how swiftly the ban will be lifted and whether this marks the end of Apple’s regulatory challenges in Indonesia—or merely another chapter in an ongoing saga.