"His letter does not apply here."

Translation: Suratnya tidak berlaku di sini.

[RubenVis24]

Is "Dia surat tidak berlaku di sini" wrong?

[MasJem]

Yes, it should be "Suratnya" or "Surat dia". Both mean the same, meaning "His / her letter...".

In Indonesian the "Item" comes before the "person".
"Bola saya" - My ball
"Ayahku" - My father
"Bukumu" - Your book
"Rumah Anda" - Your house
"Makanan kalian" - Your (plural) food

Hope this helps!

[Gustobelly]

What's wrong with 'surat miliknya...'?

[AVAX3M]

That would be an incorrect construction. "Miliknya" by itself is a noun (a possessive pronoun) as in "It is hers/his." and so cannot be used to modify "surat". You can only say "suratnya" or "surat dia", where "dia" correctly modifies "surat".