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January 9, 2025 | 04:16 pm
TEMPO.CO, Jakarta - Industry Minister Agus Gumiwang Kartasasmita has clarified that Apple's plans to establish a factory in Batam, Riau Islands, will not automatically grant the company permission to sell the iPhone 16 in Indonesia. This is because the factory will solely focus on the production of AirTags, which are considered accessories and do not qualify as core components for the calculation of Domestic Component Level (TKDN) requirements for HKT products that include cellphones, handheld computers, and tablets.
“Airtag is an accessory that does not constitute an essential component of HKT, so they cannot be counted as TKDN for HKT products,” Agus said in a written statement received by Tempo on Thursday, January 9, 2025.
He emphasized that the investment of the AirTag factory does not fulfill the criteria outlined in the Industry Ministerial Regulation Number 29 of 2017, which mandates that only investments directly related to HKT production can be considered for TKDN certification.
“If Apple wants to release the iPhone 16 in Indonesia, it must adhere to the three schemes outlined in the Industry Ministerial Regulation Number 29 of 2017,” the minister explained.
During negotiations with the Ministry of Industry, reportedly held on January 7-8, 2025, Apple representatives presented an investment proposal for the 2023-2026 period. The company opted for the third scheme, known as the "innovation scheme", which it had also chosen for the 2020-2023 period. However, the proposed investment figure fell short of the Indonesian Government's expectations.
“The Ministry of Industry has submitted a counter-proposal, outlining an investment figure calculated based on a thorough and technocratic assessment. This proposal is currently under internal review by Apple,” Minister Agus stated.
The counter-proposal from the Ministry of Industry includes several criteria for determining the appropriate investment value. These criteria include a comparative analysis of Apple's investments in other countries, ensuring fair investment practices among HKT producers operating within Indonesia, and maximizing added value and state revenue.
Furthermore, the Ministry of Industry considered the potential for job creation within the industrial ecosystem, Apple's significant sales figures in Indonesia that reached Rp56 trillion in 2023-2024, and the potential for administrative sanctions as outlined in Minister of Industry Regulation Number 29 of 2017.
Apple has also committed to settling a US$10 million debt, with a third party appointed by the Ministry of Industry tasked with assessing the settlement documentation. Minister Agus emphasized that the Ministry has grounds to impose sanctions on Apple for its non-compliance with the commitment outlined in the third scheme.
The Minister pointed out that Apple's implementation of the innovation scheme has fallen short of expectations. While the company has conducted education and training programs, as stipulated in the regulation, research and development (R&D) activities in the ICT sector within Indonesia have been deemed suboptimal.
“In the counter-proposal, the Ministry of Industry encouraged Apple to establish R&D facilities within Indonesia,” Minister Agus concluded.
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