Indonesia steps up trade protectionism with Apple and Google phone bans

South-east Asia's largest economy pushes foreign tech groups to invest locally or lose market access.

- A. Anantha Lakshmi and Diana Mariska

Just days into his presidency, Indonesia's new leader has sent a strong message to foreign tech companies looking to sell in the world's fourth-most populous country: Invest locally or lose access to the market.

But analysts warned that strategy, which remade Indonesia's economy as a commodities powerhouse, could backfire against the likes of Apple and Google as competition in the region for foreign direct investment heats up.

Over the past week, President Prabowo Subianto's government has banned sales of Apple's iPhone 16 and Google's Pixel phones, citing the companies' failure to meet requirements for 40 per cent of products to be made with locally sourced raw materials.

"We're encouraging the local content policy to create fairness for all investors, as well as to create added value domestically," Mr Febri Hendri Antoni Arief, a spokesman for the Industry Ministry, said on Nov 1.

The bans, which came a week after Mr Prabowo was inaugurated, signal that South-east Asia's largest economy could step up the use of restrictive trade policies to secure investments from foreign companies.

Critics said such policies could dent Indonesia's appeal - which is already hampered by red tape and corruption - against more investment-friendly nations in the region, such as Vietnam and Malaysia. The restrictions also come as Mr Prabowo has laid out ambitious plans to boost annual economic growth to 8 per cent.