JAKARTA, Jan 8 — Indonesia today upheld a ban on iPhone 16 sales despite Apple’s US$1 billion (RM4.5 billion) pledge to invest in the country after a negotiation deadlock, citing the company’s failure to meet domestic market requirements.

Indonesia in October prohibited the marketing and sale of the iPhone 16 model over Apple’s failure to meet local investment regulations requiring that 40 per cent of phones be made from local parts as the country seeks to boost investments from giant tech companies.

Investment Minister Rosan Roeslani told reporters on Tuesday that Apple was fully committed to invest US$1 billion to build an AirTag factory on Batam island, which was expected to supply 65 per cent of the global supply.

It was unclear if the deal on the factory in the industrial zone had been signed.

"AirTag is an accessory, not a component or part of gadgets,” Industry Minister Agus Gumiwang Kartasasmita told a press briefing on Wednesday, referring to the Apple tracking device.

"Until this afternoon, the ministry doesn’t have any reason to issue the domestic component level certificate for Apple products, especially iPhone 16,” he said.

Agus met with Apple representatives on Tuesday, but he said a deal had not been reached.

He said Indonesian officials gave Apple a counterproposal and the giant phone maker did not give an immediate answer.

"If Apple wants to sell iPhone 16 as soon as possible, the ball is in their hand, please respond to our counterproposal immediately,” he said.

Apple previously offered to increase its investments in Indonesia by US$100 million to lift the iPhone 16 sales ban, but the Indonesian government refused the proposal in November.

Despite the sales ban, the government allows iPhone 16s to be carried into Indonesia if they are not being traded commercially.

The government estimates about 9,000 units of the new model have entered the country that way.

Indonesia also banned the sale of Google Pixel phones for failing to meet the 40 per cent parts requirement.

About 22,000 Google Pixel phones entered the country last year despite the ban. — AFP