Place rice in a strainer and rinse under cold water until the water runs clear. Drain well.
Comebine the rinsed rice, coconut milk, water, sugar, and salt in the Instant Pot bowl.
Cook on high pressure for 22 minutes.
While rice is cooking, spread your coconut flakes in a dry skillet over medium-low heat. Stir constantly for 2–3 minutes until golden brown. Transfer to a bowl to stop cooking.
When cook time is up, allow Instant Pot to naturally release for 10 minutes then open the stream release valve.
Carefully open Instant Pot lid. Add toasted coconut to rice, then stir to combine and fluff the rice.