Indonesia has eased regulations on shipping mobile devices made on Batan Island to other parts of the country in a move aimed at attracting foreign manufacturers to set up facilities on the island.

Import duties are already waived on mobile gadgets produced in Batam’s free-trade zone, but distributors are required to have registered-importer status, an import permit as well as have shipments verified, the Jakarta Post reported. The number of ports/airports they can ship to is also restricted.

The new regulations will eliminate this and allow shipments to any seaport or airport, putting manufacturers on the island on the same status as those in other parts of the country.

The paper said Batam has just one handset maker, PT Sat Nusapersada, which in July began assembling handsets from parts supplied overseas. Five other firms produce mobile phones in Indonesia.

Samsung Electronics announced plans two weeks ago to set up a factory in the country to make as many as 900,000 mobile phones per month.

Oppo Electronics from China said in July is it interesting in building a factory in West Java with an annual capacity of 5-10 million units and that it was in talks with the government.

The plans are seen as being fueled by the government’s announcement in April saying it was considering taxing smartphone imports to protect domestic vendors from foreign competition.

The proposal is likely to be voted on after the new administration, led by president Joko Widodo, who is seen as business friendly, takes office in October.

The steps by the Trade Ministry to simplify procedures in Batam do come with risks, the Post said, since the island is well-known as a gateway for illegally re-shipped duty-free imports to other parts of the country.

The Batam Legislative Council estimated that last year about 70,000 handsets from the region, mainly China and Singapore, entered Batam each month and were smuggled out.

Indonesia is one of the largest consumer markets in the world, with a population of 240 million. Smartphone penetration is estimated at just 20 per cent.

IDC Indonesia has forecast shipments of mobile devices to reach 60 million this year, with 15 million smartphones and four million tablets expected to be sold this year.