Indonesia recently banned the sale of smartphones made by Alphabet’s Google for failing to meet the 40% local content requirement.

Liew told the Dewan Rakyat the key difference between Malaysia and Indonesia is that Indonesia has a much larger domestic market, with a population of about 270 million.

“Malaysia’s market is comparatively smaller. When formulating policies, we must consider both the local market and (access to) the international markets.

“So the rules imposed in Indonesia cannot be implemented at the same intensity in Malaysia,” he said.

He was responding to Sim Tze Tzin (PH-Bayan Baru), who asked whether Malaysia’s investment rules have similar requirements for using locally manufactured components, as in Indonesia.

Last Friday, Reuters reported that Indonesia has banned sales of smartphones made by Google due to rules requiring the use of locally manufactured components, days after blocking sales of tech giant Apple’s iPhone 16 for the same reason.

Companies usually increase the use of domestic components to meet Indonesia’s rules through partnerships with local suppliers or by sourcing parts domestically.

Liew said all companies receiving incentives from the Malaysian Investment Development Authority (Mida) are already required to contribute to the local economy by purchasing locally manufactured equipment or hiring local contractors.

“Mida, the ministry, and the finance ministry are currently reviewing the existing incentive schemes to align them with national investment goals,” he said.

He also said the New Investment Incentive Framework expected to be introduced in the third quarter of 2025 will include stricter regulations to ensure that foreign direct investments truly benefit the local economy.