Over the past decade, Indonesia has experienced a significant surge in agrarian conflicts, largely driven by large-scale foreign investment in sectors such as plantations, mining, and National Strategic Projects (NSPs). These conflicts stem from overlapping regulations between customary law and national law, weak recognition of customary land rights, and the implementation of the Free, Prior, and Informed Consent (FPIC) principle, which often remains a mere formality. Data from the Consortium for Agrarian Reform (2015-2024) records at least 3,234 conflicts affecting 7.4 million hectares of land and involving approximately 1.8 million households. The impacts extend beyond environmental degradation, leading to the loss of traditional livelihoods, social disintegration, and the erosion of indigenous cultural identity. This study employs a qualitative approach with a juridical-normative method through an analysis of legal frameworks, international legal instruments, and academic literature. The findings reveal a significant gap between the normative recognition of indigenous rights and their practical implementation. FPIC is not applied substantively, resulting in minimal community participation and unilateral project decisions. These findings underscore the urgency of policy reform to harmonize national law with customary law, strengthen the registration mechanism for customary land rights, and ensure the transparent and equitable implementation of FPIC. Such measures are essential to align economic development with the protection of indigenous rights and the principles of sustainability.