Jakarta. A freshly launched report shows that American businesses have invested $67 billion in Indonesia over the past decade, but Jakarta’s local content rules, among others, still remain a major deterrent to US investments.

Business lobbies AmCham Indonesia and the US Chamber of Commerce have just unveiled their latest bilateral investment report. US investments in Indonesia totaled $67 billion between 2014-2023, according to the report. The figures took into calculation upstream oil and gas investment, as well as mergers-and-acquisition activities. The investments had resulted in a $130 billion economic impact that goes beyond job creation. The numbers are also equivalent to the total costs needed to build 18 of the Jakarta-Bandung high-speed train projects. 

Despite the impressive figures, American manufacturers -- particularly those requiring components that are still unavailable locally -- find Indonesia’s domestic content rules to be troublesome.

“Most companies are part of the global supply chain. If they can’t get the parts they need to manufacture their products here with the quality that they need, [the American investors] are not going to be comfortable coming and investing here,” Lydia Ruddy, the managing director of AmCham Indonesia, told the press in Jakarta on Tuesday.

Indonesia mandates manufacturers to have some parts of the components of its products to be domestically produced as a means to grow the economy and generate jobs. The government has blocked American tech giant Apple from selling iPhone 16 in Indonesia as the company cannot meet the 35 percent local content requirement for smartphones. Apple reportedly has proposed to make a $100 million investment in Indonesia to lift the ban.

Eric Hsu, the commercial counselor for the US Embassy in Indonesia, said that Jakarta should consider not taking a one-size-fits-all approach. Industries have different levels of needs, and some might not be able to rely on local inputs.

“The objective of the local content requirement is not bad. We understand the necessity. US companies are willing to partner with the Indonesian government on this area, which is ultimately the advancement of Indonesian industrial capacity development. But there are many approaches to that,” Hsu told reporters.

“The one-size-fit-all [approach] is not practical. It gets complicated in terms of the technical calculations, and on how to work on the local content. But this is something we look forward to working with the [Indonesian] government to simplify that,” Hsu said.

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