Jakarta. Indonesia has pledged to strengthen enforcement of intellectual property (IP) rights after the United States renewed concerns over counterfeit goods and piracy in Southeast Asia’s largest economy.

The US government has retained Indonesia on its 2026 Priority Watch List for countries considered to provide inadequate IP protection as Washington intensifies scrutiny of unfair trade practices. Among the concerns cited were widespread piracy, limited legal deterrence, and the growing presence of counterfeit products linked to relocated Chinese factories.

Hermansyah Siregar, director general of intellectual property at the Law Ministry, said the government remained committed to protecting IP rights for both domestic and foreign companies.

“Indonesia is strongly committed to protecting and enforcing the law on IP rights for firms from home and abroad, including the US. IP protection is not just an international obligation, but also vital for a healthy investment climate,” Hermansyah told the Jakarta Globe in a recent interview.

According to Hermansyah, rights holders can request the removal of online stores found to infringe trademarks and may also register their IP with customs authorities to help prevent counterfeit imports. Since January 2025, Indonesia has blocked at least 1,004 websites distributing pirated content.

However, Indonesian law generally requires formal complaints from rights holders before authorities can pursue trademark infringement cases.

“Foreign firms should actively report any infringement so we can promptly take action in accordance with the law,” Hermansyah said.

The US ranked as Indonesia’s fourth-largest source of foreign direct investment in the first quarter of 2026, with investment totaling $1.3 billion.

Rahma Gafmi, an economics professor at Airlangga University, warned that weak IP enforcement could jeopardize Indonesia’s ambition to attract more technology-intensive industries as global manufacturers diversify production bases away from China.

She said inadequate protection of IP could discourage investment in sectors such as advanced manufacturing, pharmaceuticals, and digital technology.

“Inadequate IP protection will only add costs for investors. They have to spend more on internal and legal protection. This will make us less attractive compared to Vietnam and Thailand,” Rahma told the Globe.

“Indonesia is at risk of becoming just another low-tech manufacturing hub.”

She added that stronger legal protections would be essential if Indonesia hopes to capitalize on the relocation of manufacturing operations from China.

“If Indonesia wants to benefit from the relocation of Chinese manufacturing, IP protection is a must,” Rahma said.

“Otherwise, high-quality investments with advanced technology and skilled jobs will move to countries with better legal certainty and stronger IP safeguards.”

Rahma also called for tougher legal penalties against large-scale counterfeit operations, arguing that enforcement should go beyond confiscating fake products from retailers.

Authorities should not only target retail traders but also pursue the financiers and operators behind large-scale counterfeit production, she said.

“Don’t just pursue the retail traders. Throw the perpetrators in jail for a deterrent effect,” Rahma said.

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