Hinduism in Indonesia is practised by 1.7% of the total population, and by 83.5% of the population in Bali as of the 2010 census. Hinduism is one of the six official religions of Indonesia. In 2010, there were an estimated total of over 4 million Hindus in Indonesia according to Indonesian census. The Parisada Hindu Dharma Indonesia disputed the census methodology, and estimated 18 million Hindus lived in Indonesia in 2005. In 2010, the Ministry of Religious Affairs of the Government of Indonesia estimated that about 10 million Hindus lived on Indonesian islands, in contrast to the Indonesian official decadal census of over 4 million. Nevertheless as of 2017, Indonesia has the largest number of Hindus living in the region and outside of South Asia.
The natives of Indonesian Archipelago practiced indigenous animism and dynamism, beliefs common to the Austronesian people. Native Indonesians venerated and revered ancestral spirit; they also believed that some spirits may inhabit certain places such as large trees, stones, forests, mountains, or any sacred place. This unseen spiritual entity that has supernatural power is identified by ancient Javanese, Sundanese and Balinese as "hyang" that can mean either divine or ancestral. In modern Indonesian, "hyang" tends to be associated with God.
Hindu influences reached the Indonesian Archipelago as early as the first century. Historical evidence is unclear about the diffusion process of cultural and spiritual ideas from India. Java legends refer to Saka-era, traced to 78 AD. Stories from the Mahabharata Epic have been traced in Indonesian islands to the 1st century; however, the versions mirror those found in southeast Indian peninsular region (now Tamil Nadu and southern Andhra Pradesh). The Javanese prose work Tantu Pagelaran of the 14th century, which is a collection of ancient tales, arts and crafts of Indonesia, extensively uses Sanskrit words, Indian deity names and religious concepts. Similarly ancient Chandis (temples) excavated in Java and western Indonesian islands, as well as ancient inscriptions such as the 8th century Canggal inscription discovered in Indonesia, confirm widespread adoption of Shiva lingam iconography, his companion goddess Parvati, Ganesha, Vishnu, Brahma, Arjuna, and other Hindu deities by about the middle to late 1st millennium AD. Ancient Chinese records of Fa Hien on his return voyage from Ceylon to China in 414 AD mention two schools of Hinduism in Java, while Chinese documents from 8th century refer to the Hindu kingdom of King Sanjaya as Holing, calling it "exceedingly wealthy," and that it coexisted peacefully with Buddhist people and Sailendra ruler in Kedu Plain of the Java island.