For five months, Indonesians didn’t have access to Apple Inc.’s latest iPhone 16, as a tug of war between the country and company ensued. The tussle was initiated by a more assertive new government, which banned sales of the handset on the grounds that the US company didn’t meet domestic manufacturing requirements.

It appears to have paid off. Apple ultimately agreed to raise its investment in Indonesia to $1 billion, orders of magnitude higher than its initial $10 million offer. As part of the investment, Apple will set up a local AirTag factory and another plant producing components for AirPods. It will also invest in a software research and development centre.

The iPhone 16 family will soon be licensed for sale in the country and the authorities can claim a victory in pushing a global tech behemoth to share the benefits of operating in its consumer market of of 278 million people.

Indonesia had been the last major emerging market where Apple didn’t already have local production. India, Vietnam, Mexico and Brazil all have large populations and manufacture Apple goods locally.

With this outcome, Indonesia could be setting a template for other emerging economies. Not all can leverage as large a population, to be sure, but all countries are interested in moving up the value chain in manufacturing — they want their workforces to learn how to design, not just assemble, advanced electronics. Whether it’s the potential for sales growth or, as in Indonesia’s case, natural resources, we now have more evidence that governments can negotiate better terms with multinationals.

Indonesia has also banned exports of nickel ore, as a move to push foreign companies to process the commodity in the country. That has brought billions of dollars in investment. But opinions are split on how sustainable this approach will be.

“It may seem like Indonesia won this round, but strong-arming investors into opening factories is not a long-term industrial strategy,” said Marco Förster, Asean director at business advisory firm Dezan Shira. “China and the US can afford to play hardball, but Indonesia, despite its growing market power, risks damaging investor confidence.”

In covering the back-on-forth since Indonesia’s iPhone 16 ban, I’ve seen it take a few unpredictable turns. First, Apple is not known for being a timid negotiator and yet the company has conceded ground several times.

Apple’s initial foray of an additional $10 million in local investment was declined. The company then raised its offer to $100 million and finally $1 billion, with President Prabowo Subianto directing his ministers to accept the upgraded deal. However, the Ministry of Industry last month unexpectedly upheld the ban as it sought better terms. Apple’s executives who had flown to the capital Jakarta hoping for closure left empty-handed after the scuttled deal in January.

The episode is now coming to a close and couldn’t have come at a better time for Indonesia’s new president Prabowo and his administration, which took the helm in October. The optics of a US tech giant yielding to the administration could be used to boost Prabowo’s domestic approval, which has taken a hit following protests over sweeping spending cuts and abrupt policy changes.