Geographical Indications: A Pathway for Indonesian MSMEs to Compete Globally

Okt 25, 2025 | Berita

Indonesian MSMEs

As globalisation accelerates and market competition intensifies, Indonesia’s Micro, Small, and Medium Enterprises (MSMEs) face growing pressure to maintain product quality while building a distinctive identity recognised beyond local markets. Many Indonesian products, renowned for their authenticity and regional uniqueness, struggle to retain their added value internationally due to imitation and unauthorised commercial use.

Geographical Indications (GIs) serve as an essential form of Intellectual Property (IP) protection that links a product’s quality and reputation to its geographical origin. For local Indonesia MSMEs, GIs are more than a legal label—they represent reputation, quality, and cultural heritage, helping elevate traditional goods into competitive global commodities.

 

Understanding Geographical Indications in Indonesia

 

Under Law No. 20 of 2016 on Trademarks and Geographical Indications, a GI is defined as a sign indicating the origin of goods whose qualities, reputation, or characteristics are essentially attributable to their geographical environment, either natural, human, or a combination of both. This concept aligns with Article 22 paragraph 1 of the TRIPs Agreement, which defines GIs as indications identifying goods as originating from a specific territory where a given quality, reputation, or characteristic is fundamentally linked to that origin.

Unlike individual intellectual property rights, GI protection is communal in nature. iIt belongs to producer associations or communities, not individuals. Famous examples include Gayo Coffee, Bali Gringsing Weaving, and Kusamba Salt, all of which are legally protected as certified GIs.

GIs differ from Communal Intellectual Property (CIP) as regulated under Government Regulation No. 56 of 2022. While CIP protection does not require registration and is declarative in nature, GIs must be formally registered to obtain legal protection. However, not every geographically linked product qualifies. Applications may be rejected if the indication contradicts public order, is misleading, or duplicates an existing registered GI.

 

Why Geographical Indications Matter for MSMEs

 

For MSMEs, the benefits of GIs extend well beyond legal protection. They enhance economic value, marketing appeal, and cultural preservation, which are three key pillars of sustainable business growth.

From an economic perspective, GI-certified products tend to command higher market prices due to guaranteed authenticity and consistent quality. For instance, Bali Kintamani Arabica Coffee, registered as a GI in 2008, enjoys strong export demand in Europe and Japan, reflecting global consumer trust in origin-based branding.

In marketing terms, GIs serve as a powerful promotional tool. The GI label assures consumers that a product genuinely originates from a specific region, enhancing credibility and attracting international importers who value traceability and authenticity.

Culturally, GIs help preserve local wisdom and traditional methods, ensuring that heritage production practices continue to thrive while benefiting local communities economically. A GI label thus symbolises both legal recognition and the enduring relationship between product, geography, and craftsmanship.

In summary, GIs support MSMEs by::

  1. Providing legal protection for regional product reputations;
  2. Enhancing competitiveness and market value;
  3. Preserving local culture and identity.

Also read: Indonesia’s Customs Rules on Passenger-Carried Imported Goods: Duties, Exemptions, and Penalties

 

Registering a Geographical Indication in Indonesia

 

To gain protection, producers or associations must register their products with the Directorate General of Intellectual Property (DJKI) under the Ministry of Law and Human Rights. Eligible applicants include:

  1. Associations representing producers in a defined geographical area producing natural resources, handicrafts, or industrial goods; and
  2. Provincial or regency/municipal administrations.

The registration process involves several stages:

  1. Submission of an application and supporting documents;
  2. Administrative examination, with a three-month correction period for incomplete filings;
  3. Substantive examination by expert reviewers;
  4. Publication of the decision in the Official GI Gazette for a three-month opposition period;
  5. Opposition and rebuttal (if any);
  6. Registration and certification, once approved and uncontested;
  7. Ongoing supervision of GI use; and
  8. Appeal process, should the application be rejected.

Unlike most IP rights that expire after a fixed term, GIs are protected indefinitely, as long as the product maintains its reputation, quality, and distinct characteristics. This makes GI protection both dynamic and sustainable—its strength depends on the stakeholders’ ability to uphold standards and authenticity.

Also read: The Benefits of Green Energy in Indonesia’s Industrial Sector: Legal Framework, Incentives, and Compliance

 

Building Global Value Through Geographical Indications

 

After registration, the real challenge lies in managing and promoting GI-certified products effectively. Holders must establish producer organisations to monitor quality, issue usage licences, and coordinate marketing.

Effective promotion strategies may include:

  1. Consistent product certification and labelling;
  2. Participation in international trade fairs;
  3. Collaboration with global e-commerce platforms;
  4. Crafting a brand narrative that connects product authenticity with local heritage;

Beyond legal protection, storytelling is key to link the product’s origin, culture, and sustainability creates emotional and commercial value in global markets increasingly driven by authenticity and ethical consumption.

Also read: Indonesia’s Mining Regulations and Their Impact on Foreign Investors

 

Strengthening Indonesia’s Local Brands Through Legal Recognition

 

Geographical Indications offer Indonesian MSMEs a strategic path to scale up and compete globally. They combine legal certainty, market advantage, and cultural preservation. 

Through strong cooperation between government, local communities, and private enterprises, Indonesia can enhance the global recognition of its traditional products, positioning the nation as a leader in high-value, origin-based goods.***

Also read: Money Laundering in Indonesia: Legal Framework, Enforcement, and Evolving Methods

Regulation:

  • Undang-Undang Nomor 20 Tahun 2016 tentang Merek dan Indikasi Geografis (“UU MIG”). 
  • Trade Related Aspects of Intellectual Property Rights (“TRIPs”).
  • Peraturan Pemerintah Nomor 56 Tahun 2022 tentang Kekayaan Intelektual Komunal (“PP 56/2022”). 

References:

  • Ika Saputri, & Tongat. (2024). Hak Kekayaan Intelektual Kolektif dan Indikasi Geografis: Tantangan dan Peluang Bagi Produk Khas Indonesia di Pasar Internasional. Fundamental: Jurnal Ilmiah Hukum, 13(2), 210–222. (Diakses pada 16 Oktober 2025 pukul 13.41 WIB).
  • Adyatma, E. F., Palar, M. R. A., & Rafianti, L. (2025). Pelindungan Hukum dan Upaya Optimalisasi Potensi Ekonomi Indikasi Geografis Kopi Robusta Java Bogor. Media Hukum Indonesia (MHI), 2(5), 201–209. (Diakses pada 16 Oktober 2025 pukul 13.55 WIB).
  • Ayu Palar, M. R., Rafianti, L., & Muchtar, H. N. (2023). Inclusive Rights to Protect Communal Intellectual Property: Indonesian Perspective on Its New Government Regulation. Cogent Social Sciences, 9(2). (Diakses pada 16 Oktober 2025 pukul 14.06 WIB).
  • Indikasi Geografis: Menjaga Warisan, Meningkatkan Daya Saing Produk Lokal. Kompas.id. (Diakses pada 16 Oktober 2025 pukul 14.23 WIB).
  • Kopi Kintamani Bali: Sejarah Cita Rasa dan Proses Budidaya. Kampus Kopi. (Diakses pada 16 Oktober 2025 pukul 14.30 WIB).
  • Alur Bisnis Proses Pendaftaran Indikasi Geografis. Direktorat Jenderal Kekayaan Intelektual (DJKI). (Diakses pada 16 Oktober 2025 pukul 14.40 WIB).