Djibouti is located in north eastern Africa, strategically located at the strait of Bab el Mandeb, which links the Red Sea with the Gulf of Aden. The Republic of Djibouti takes its name from its capital city, Djibouti. Located at the intersection of trade routes connecting the Indian Ocean with the Mediterranean Sea, and Africa with the Middle East, Djibouti has long been a cultural and commercial crossroads. It is bounded by Eritrea (N), Ethiopia (W, S), Somalia (S), and the Gulf of Aden (E). Djibouti is the capital, largest city, and most significant port.

Climate: Djibouti’s location astride the East Africa, Red Sea, and Gulf of Aden rift systems provides a unique environment for studying volcanic, geothermal, and earthquake activity arising from the meeting of three tectonic plates. Over 600 tremors occur every year, virtually none of which are felt.

Population: The population of the republic of Djibouti reaches around 800,000 inhabitants, with 400,000 people gathered in the city of Djibouti. The inner districts; Ali-Sabieh, Dikhil, Obock, Tadjourah and Arta; gather 20 to 30,000 inhabitants each. The remaining of the population is composed of nomads who live in the bush. The Afar people and the Somali people are the two main groups in the country. There is a significant minority of Arabs from Yemen, along with other groups coming from Ethiopia, Europe, and the Indian sub-continent

Economy: Djibouti's economy is based on a number of service activities associated with its strategic location and its position as a free-trade zone. It is a major port for NE Africa, as well as an international trans-shipment and refuelling centre. Otherwise, the nation is largely economically underdeveloped. Nomadic pastoralism is a chief occupation; goats, sheep, and camels are raised. Date palms are grown and there is a small fishing industry. Manufacturing is mainly limited to food processing and shipbuilding and repair.

The city of Djibouti is the terminus of the Addis Ababa–Djibouti RR; it and the port were undergoing modernization in the late 1990s. The main exports are hides, cattle, and coffee (trans-shipped from Ethiopia). Djibouti imports transport equipment and petroleum, as well as most of its food and consumer goods; its economic development depends largely on foreign investment and aid. The main trading partners are France and other European Union countries, Ethiopia, Japan, Saudi Arabia, and Yemen.

Investment Climate

With its strategic position, Djibouti offers companies who want to develop in Africa access to many markets such as the COMESA, The Arab world, The European Market (UE), and USA (AGOA). Djibouti offers a strong economy and preferential agreements with many countries. Despite the limited local market, Djibouti offers many opportunities for businessmen looking for new emerging markets with modern infrastructures such as:

The main sectors of opportunity are: Salt processing; tourism; Geothermal power; Insurance; Telecommunications and Power. These are covered in detail on the website of the National Investment Promotion Agency: http://www.djiboutinvest.dj/.

Djibouti – India Relations 

Contacts between India and Djibouti have existed since ancient times. The port of Adulis was the hub of maritime trade where Indian seafarers have flocked trading in spices and silk for gold and ivory. The people of Djibouti are born from a contact among the cultures of East Africa, the Arab peninsula and the Indian sub-continent. Present day relations received a boost with the historic visit of the President of Djibouti to India in May 2003. The visit opened up vistas of opportunities in many areas of mutual interest. It has enhanced contacts and business linkages.

Political Relations: The relations between India and Djibouti are traditionally warm and friendly and were reinvigorated following the visit of the President of Djibouti to India. Both countries share similar perceptions on issues of common concern and those that affect developing countries. Bilateral contacts have increased in the last one year.

Bilateral Visits: H.E. Mr. Ismail Omer Guelleh, President of the Republic of Djibouti made a historic visit to India in May 2003. He was accompanied by the Minister of Foreign Affairs and International Cooperation, the Minister of Defence, the Minister of National Education and the Minister of Public Works and Public Transport. A 30 member business delegation also accompanied the official entourage.

Important Bilateral Treaties and Agreements:

Commercial and Economic Relations: Trade between India and Djibouti is mainly conducted by the Indian community. However, following Presidential visit in May 2003, business interaction between the business community of the two countries have picked up considerably. The major items exported to Djibouti from India are: machinery and instruments; cosmetics/toiletries; manufactures of metals; pharmaceuticals; paper and plastic products; yarns and fabrics, and transport and food items. The main items of imports from Djibouti to India are: raw hides & skins and leather.

Investment/Joint Ventures: The first project of India-Djibouti Cooperation is the setting up of a cement plant in Ali Sabieh under Government of India Credit. Cooperation in other sectors is also being explored.

Djibouti Country Data