Indonesian Minister of Industry, Agus Gumiwang Kartasasmita, has urged American technology company Apple to commit US$1 billion (Rp 15.9 trillion) for the development of a production facility (factory) in the country.

The tech giant has increased its investment commitment by tenfold, from US$100 million to US$1 billion, in a bid to facilitate the sales of the iPhone 16, which is currently facing restrictions in Indonesia.

"Regarding the iPhone, In shaa Allah (God willing), they will choose the first option, which is to invest in a production facility," Agus told the media on the sidelines of the opening of Industrial Fest 2024 in Surabaya, East Java on Wednesday, December 4, 2024.

He cited that he has been in intensive discussions with the Minister of Investment and Downstream Industry/Head of the Investment Coordinating Board (BKPM), Rosan Perkasa Roeslani, to determine the best scheme to realize Apple's investment in Indonesia.

However, details regarding the specific investment scheme, techniques, and industrial areas for the US$1 billion commitment are still under coordination.

"We will assist in every way possible to ensure that Apple's investment proceeds smoothly, as agreed, so that Apple can thrive in Indonesia by establishing a production facility or factory," Agus said.

He emphasized that Apple's decision to invest US$1 billion reflects the government's commitment to fairness in investment practices.

Previously, the Indonesian government rejected Apple's proposal to invest US$100 million (Rp 1.58 trillion), as it was seen as disproportionate to the volume of Apple products sold in the country, which reached 2.5 million units in 2023.

This was in stark contrast to Apple's investment in Vietnam, which amounted to Rp140 trillion, despite the country having a smaller market of 1.5 million units.

Contribution to development, employment

The Indonesian government has also noted that other smartphone and tech manufacturers, such as Samsung, which invested Rp8 trillion, and Xiaomi with Rp5 trillion, have made larger investments and established production facilities in Indonesia.

"We are also considering the contributions to employment created by each smartphone, tablet, and handheld computer producer," Agus added.

He said further that Apple's US$1 billion investment is crucial for maintaining its significant market share in Indonesia, warning that without the investment, Apple risks losing its market access due to licensing issues.

"If they don't invest, they will lose the market here because they won't be able to sell their products," Agus concluded.