Apple's US$160 Million Investment in Indonesia Expected to Proceed Despite US Tariff Changes
JAKARTA — The Deputy for Investment Climate Development at the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM), Riyatno, has provided an explanation regarding the fate of Apple Inc.'s investment following Indonesia being subject to a 19 per cent import tariff from the United States.
Apple has already committed to investing US$160 million (equivalent to Rp 2.6 trillion) in Indonesia. The planned investment is intended to fulfil local content requirement (TKDN) obligations, a prerequisite for selling its products in the domestic market, including the iPhone 16.
"We are optimistic that the planned investment will proceed, especially since the Minister has on several occasions indicated that Apple has already purchased land for its investment plan in Batam," said Riyatno at the Ministry of SMEs office in Jakarta on Friday (18/7/2025).
"In our view, it will continue. It is unlikely to be cancelled. In all probability, it will go ahead," he added.
However, Riyatno declined to comment when asked about the progress of Apple's investment realisation in Batam, stating that Minister of Investment and Downstreaming/BKPM Head Rosan Roeslani would provide further details.
"For the latest developments on that, you would need to ask the Minister," he said.
Previously, economist Tauhid Ahmad of the Institute for Development of Economics and Finance (Indef) suggested that Apple's substantial investment could potentially be cancelled following Trump's reduction of import tariffs for Indonesia. According to him, Indonesia's response to the 19 per cent US import tariff would not be limited to eliminating import duties on American products. Trump would most likely also request the government to relax non-tariff barrier (NTB) policies for American companies.
Non-tariff barriers refer to policies that impede the entry of imported goods or restrict trade beyond import and export duties. NTBs have been a point of contention for the US, particularly the requirement to meet a certain percentage of local content (TKDN) in their products. The US has even objected to TKDN requirements, viewing them as protectionism that obstructs free trade and reduces market access for its products.
"If we read the clauses in the initial letter, there are many points regarding non-tariff barriers, one of which is TKDN. Under TKDN, Apple's plan was to invest in Batam as a consequence of their sales — they would have to build a factory," said Tauhid when contacted on Thursday (17/7/2025).
Apple has already committed to investing US$160 million (equivalent to Rp 2.6 trillion) in Indonesia. The planned investment is intended to fulfil local content requirement (TKDN) obligations, a prerequisite for selling its products in the domestic market, including the iPhone 16.
"We are optimistic that the planned investment will proceed, especially since the Minister has on several occasions indicated that Apple has already purchased land for its investment plan in Batam," said Riyatno at the Ministry of SMEs office in Jakarta on Friday (18/7/2025).
"In our view, it will continue. It is unlikely to be cancelled. In all probability, it will go ahead," he added.
However, Riyatno declined to comment when asked about the progress of Apple's investment realisation in Batam, stating that Minister of Investment and Downstreaming/BKPM Head Rosan Roeslani would provide further details.
"For the latest developments on that, you would need to ask the Minister," he said.
Previously, economist Tauhid Ahmad of the Institute for Development of Economics and Finance (Indef) suggested that Apple's substantial investment could potentially be cancelled following Trump's reduction of import tariffs for Indonesia. According to him, Indonesia's response to the 19 per cent US import tariff would not be limited to eliminating import duties on American products. Trump would most likely also request the government to relax non-tariff barrier (NTB) policies for American companies.
Non-tariff barriers refer to policies that impede the entry of imported goods or restrict trade beyond import and export duties. NTBs have been a point of contention for the US, particularly the requirement to meet a certain percentage of local content (TKDN) in their products. The US has even objected to TKDN requirements, viewing them as protectionism that obstructs free trade and reduces market access for its products.
"If we read the clauses in the initial letter, there are many points regarding non-tariff barriers, one of which is TKDN. Under TKDN, Apple's plan was to invest in Batam as a consequence of their sales — they would have to build a factory," said Tauhid when contacted on Thursday (17/7/2025).