Apple is facing significant challenges in Indonesia, Southeast Asia’s largest economy, after a sales ban on its iPhone 16 lineup due to non-compliance with local investment and certification requirements. The Indonesian government mandates that 40% of components in devices sold within the country must be locally sourced, supported by a valid certification. Apple’s previous certificate expired, leaving the tech giant unable to market its latest devices in the region.

In response, Apple is actively seeking solutions to resolve this impasse. The company has already invested 1.48 trillion rupiah ($94.53 million) of its promised 1.71 trillion rupiah ($109.6 million) in Indonesia but remains short of its target. As part of its strategy, Apple has proposed a $100 million investment over the next two years, a significant increase from its previous $10 million offer for a factory in Bandung to manufacture accessories and components. While the Ministry of Industry has yet to accept this proposal, the government emphasizes the importance of fostering research and development efforts within the country.

One of Apple’s initiatives to demonstrate its commitment to Indonesia includes the establishment of Apple Developer Academies, which provide training for aspiring app developers. With three academies already operational and a fourth announced earlier this year, the move underscores Apple’s broader innovation development scheme in the region. Despite these efforts, the iPhone 16 remains unavailable in Indonesia, forcing local consumers to purchase the device overseas and pay hefty import fees.

Indonesia’s stringent approach extends beyond Apple, as Google’s Pixel 9 smartphones are also barred from sale for similar reasons. With over half of Indonesia’s 278 million population under the age of 44 and highly tech-savvy, the country represents a critical market for global technology companies. The government’s policies highlight a strategic push to ensure multinational firms contribute more substantially to local economic development.

The ban has not only impacted Apple’s sales but also underscores the broader dynamics of doing business in rapidly growing economies. Multinational corporations like Apple and Google must navigate complex regulatory environments while addressing local investment requirements. As negotiations continue, Apple’s increased investment offer signals its intent to strengthen its foothold in the Indonesian market and align with the country’s economic priorities.