Police in the Indonesian capital Jakarta have arrested an Iranian refugee who lives in Melbourne on allegations of people smuggling.

Mohammad Abdi, 36, was arrested along with two other Iranian refugees by anti-smuggling police who raided an apartment in West Jakarta early yesterday morning.

Indonesian police say the man, who holds Australian travel documents but is yet to become a citizen, was arrested with two other people.

Senior Police Commissioner Nasri says more than $50,000 was seized in the raid, as well as mobile phones and passports.

Mohammad Abdi, also known as Said Ali, is understood to have arrived in Australia in 2011 and been granted protection as a refugee.

The Australian Federal Police confirmed that he is travelling on Australian documents.

Commissioner Nasri said the arrests were linked to another arrest about two weeks ago.

An Afghan refugee and Australian citizen, Ali Qasem, was recently sentenced to six years jail in Jakarta for people smuggling.