Apple Inc.’s executive, who was in Jakarta negotiating to lift Indonesia’s sales ban on the iPhone 16, left the city on Wednesday after a late-stage change in stance by a minister derailed the deal, according to sources familiar with the matter.
Apple’s Vice President of Global Affairs, Nick Amman, left Jakarta without a deal, despite Indonesia’s President Prabowo Subianto directing ministers last month to accept Apple’s $1 billion investment offer and resolve the issue.
Indonesia had banned the sale of Apple’s flagship device in October, citing the company’s failure to meet local manufacturing requirements for smartphones and tablets.
Apple’s $1 billion offer included a plan for one of its suppliers to set up a plant on Batam Island to produce AirTags, along with funding local academies to teach tech skills like coding.
However, despite President Subianto’s approval, Minister for Industry, Agus Gumiwang Kartasasmita decided to maintain the ban during talks this week.
He informed Amman and the Apple delegation that Apple needed to comply with a local regulation requiring the company to manufacture part of its iPhones or their components domestically.
According to sources familiar with the matter, who requested anonymity due to the sensitivity of the issue, the situation highlights the internal power struggles within Indonesia’s new government.
It also underscores the challenges faced by global companies seeking to tap into the large consumer base in developing economies while navigating volatile and increasingly nationalistic local politics.
Apple representatives, as well as the President’s office and spokespeople from the Ministry of Industry, did not respond to requests for comment.
After receiving a briefing on Apple’s expanded proposal over a weekend last month, President Prabowo grew more favorable towards the plan, which included funding to set up a plant in Bandung for producing other accessories.
He then authorized the government to accept Apple’s offer and urged his cabinet to pursue further investments going forward.
Prabowo instructed his Coordinating Minister for Economic Affairs, Airlangga Hartarto, to take the lead and finalize the deal.
However, it was Kartasasmita who insisted that Apple meet the local manufacturing requirement before lifting the ban, according to sources.
