APPLE has proposed investing nearly $10 million to manufacture additional products in Indonesia, according to people familiar with the matter, in a bid to have the country lift a ban on the sale of its latest iPhone.

The plan would involve Apple investing in a factory in Bandung, southeast of Jakarta, in partnership with its list of suppliers, the sources said, asking not to be identified because they are not authorized to speak publicly . The factory would make products such as accessories and components for Apple gadgets, the sources said.

Apple submitted its proposal to the country’s industry ministry, which last month blocked a permit allowing the sale of the iPhone 16 on the grounds that the local unit of the US tech giant did not meet the 40% national content requirement for smartphones and tablets.

The ministry is deliberating on the proposal, which is not final and could be subject to change, and is expected to reach a decision soon, the sources said.

Apple did not respond to a request for comment. The Industry Ministry also did not respond to a request for comment.

Indonesia’s iPhone 16 ban is the latest example of pressure new President Prabowo Subianto’s government is putting on international companies to boost local manufacturing while seeking to protect domestic industries. The Southeast Asian nation also banned the sale of Alphabet’s Google Pixel phones due to a similar lack of investment.

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These measures are a continuation of similar tactics used during the administration of former President Joko Widodo. Last year, Indonesia blocked China’s ByteDance in a bid to protect its retail sector from cheap Chinese goods, prompting the hugely popular video service to invest $1.5 billion in a joint venture with Tokopedia, the e-commerce arm of the Indonesian GoTo Group. .

Apple does not have standalone factories in Indonesia and, like most multinationals, partners with local suppliers to make components or finished products. An investment of nearly $10 million would be a relatively small price for Apple to pay freer access to Indonesia’s roughly 278 million consumers – more than half of whom are under 44 and tech-savvy.

While Indonesia may view Apple’s additional investment – if it happens – as a victory, its heavy-handed approach risks deterring other companies from ramping up their presence or establishing a footprint in the first place, particularly those seeking to move away from China. It could also undermine Prabowo’s goal of attracting foreign investment to grow the economy and fund political spending.

According to the Indonesian government, Apple has only invested 1.5 trillion rupiah (S$125 million) in the country through developer academies, which falls short of its 1.7 trillion rupiah commitment. Officials also asked e-commerce players Tokopedia and TikTok to remove iPhone 16 sellers from their platforms or face legal action.

Indonesia has a history of haphazard trade policies.

Earlier this year, the government imposed restrictions on imports of thousands of products – from Macbooks to tires to chemicals – to force foreign companies to step up production. But the move sparked an outcry among the business community, including players with a long-established manufacturing presence in the country, such as LG Electronics, which complained about not being able to import certain components to make machines. washing and televisions.

Despite Indonesia’s repeated calls for international companies to boost manufacturing, its local industry is withering. The manufacturing sector’s share of gross domestic product fell to 18.7 percent last year, from 21.1 percent in 2014. BLOOMBERG