The federal government has remained silent on leaked documents showing surveillance was undertaken from its Jakarta embassy as part of a US-led intelligence-gathering operation.
But Indonesian's foreign minister Marty Natalegawa has called the alleged espionage unacceptable, and warned it could derail bilateral co-operation on issues like people smuggling and terrorism.
The diplomatic tussle comes as Ms Bishop prepares to leave for Indonesia on Wednesday, where she will attend the Bali Democracy Forum later this week.
But the foreign minister has downplayed the fallout from the spying allegations, denying relations had been frayed.
"I don't accept that there has been a rift," Ms Bishop told ABC TV on Tuesday.
"I'm looking forward to having a very productive conversation with Dr Natalegawa and other Indonesian ministers."
Ms Bishop said she had a "very fruitful" discussion with visiting Indonesian ministers on Tuesday about the mutual benefit of working together on issues like combating terrorism and people smuggling.
"That will continue to be the case," she said.
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