Indonesia will use data from miniature satellites around the globe to pinpoint the location of illegal fishing vessels trawling its vast waters, under an agreement announced Wednesday with a Silicon Valley tech firm.

The deal upgrades Jakarta's arsenal against illegal fishing by allowing it to more accurately monitor its remote territory, including in the South China Sea where Indonesian and Chinese vessels clashed last month.

A memorandum of understanding has been signed between Fisheries Minister Susi Pudjiastuti and Spire Global, the satellite-powered data company confirmed. Spire runs a fleet of "nanosatellites" that can detect and track ships as they pass through Indonesian waters.

Ships on the high seas are required by international law to carry a transponder that "pings" information via radio frequency about their identity and location to other vessels in order to avoid collisions.

Spire's miniature satellites -- each no bigger than a wine bottle -- collect this publicly available information to quickly and accurately construct a global map of shipping movements, and transmit this data to authorities on the ground.

Indonesia can then respond to any "red flags" -- like a vessel switching off its transponder -- that might suggest a suspicious ship is passing through their territory, Spire's business development executive Mark Dembitz told AFP.

"This provides them an additional arrow in the quiver to fight the good fight," said Dembitz.

"They are looking to use as much technology as they possibly can to solve their illegal fishing problem."

It will also give Indonesia a technological edge to closely monitor its vast exclusive economic zone (EEZ) around the remote Natuna Islands in the South China Sea, the scene of a tense standoff between Jakarta and Beijing last month.

Indonesia was towing a Chinese vessel it claimed was trawling without a permit near the fish-rich Natunas when Chinese coastguards appeared and rammed the captured boat.

Indonesia does not have overlapping territorial claims with Beijing in the hotly disputed waters, but it does object to a segmented line China uses to define its claims since this overlaps Indonesia's EEZ north of the Natunas.

Indonesia, a vast archipelago of 17,000 islands, has taken a tough stance on illegal fishing, impounding around 200 foreign vessels caught trawling without permits.

Many of those vessels have later been blown up in spectacular public displays that have stoked tensions with Indonesia's neighbours and trading partners.

Jakarta remains unapologetic and has vowed to defend its maritime borders from the illicit trade it claims costs billions every year in lost revenue.