Eritrea is located in North East Africa and includes the Dahlak Archipelago and other islands along the Red Sea coast. It is bordered by Sudan to the north and west, Ethiopia to the south, Djibouti to the south-east and the Red Sea to the north and north-east. It was not until the arrival of the Italians in the 19th century however that the country was officially called Eritrea.

Eritrea covers (including the Dahlak archipelago) an area of 124,324 sq km and is comprised of a high plateau and a coastal plain. The altitude ranges from the highest mountain, Emba Soira (3,010 m), to the Dankalia depression (116 m below sea level). The coastal plain consists of semi-arid desert. Asmara, the capital of Eritrea has a population of 500,000 people. Assab has 28,000 and Massawa 25,000 inhabitants.

Eritrea has a population of 4,906,585 (July 2007 est.) divided by religions and languages. The more than 3.9 million citizens of Eritrea belong to nine major ethnic groups, and are part of three distinct linguistic families - the Cushitic (or Hamitic), the Semitic, and the Nilotic languages.

Investment Climate

The Eritrea Investment Center, a department functioning under the Ministry of Trade and Industry is a one-stop shop for promoting and facilitating investments in Eritrea. The center is committed to support and encourage investment by assisting investors to acquire the necessary legality and by way of incentives and guaranties.

Sectors of Opportunity: In Eritrea sectors with high prospects for development and lucrative investment opportunities include: agriculture, fisheries, fish processing, manufacturing, communications banking, transport and tourism.

Agriculture - Despite plenty of arable land and significant water resources Eritrea has, at present not only the proportion of the cultivated land is so small but farming is practiced on the basis of archaic and traditional methods. In light of these, there is ample room for accelerated agricultural development if enough investment is channelled to the sector. Large productivity gains could be achieved from a relatively modest investment in new and improved methods. Using modern cultivation, fertilization, plant protection and water conservation techniques large quantities of food crops, exports and as raw materials for industrial enterprises can be produced. The development of irrigated agriculture in the lowland river basins is highly promising. Also, Eritrea is endowed with suitable animal husbandry and livestock development, though the current development of this sub-sector is so low. If modern animal husbandry, improved animal feed, interbreeding efforts, veterinary and vaccination services are introduced high investment returns can be obtained from this.

Marine Resources - Eritrea's coastal waters are among the most productive fishing grounds in the Red Sea. The continental shelf covers more than 52,000 km2. The maximum sustainable yield (MSY) is between 50-70,000 tons per year. The existing fish population include: groupers, jack, catfish, mackerel, barracuda, shark, queen fish, tuna, kingfish, sea bream, and sole. Despite the high potential, the marine sector is one of the most undeveloped activities in Eritrea. With the introduction of improved equipments, facilities, infrastructure and transport networks via investment high returns can be harnessed from this sub sector. In light of this the Government is keenly interested to promote foreign investment (including collaborations) in this area of the economy.

Manufacturing - At present, much of the sector is in need of substantial investment for rehabilitation and expansion. Promising manufacturing opportunities for investment can be found in textiles, garment, leather products, general food processing, cement and other construction materials, and a wide range of chemical (including salt) and mechanical manufacturing that can supply the domestic, regional and international markets. Eritrea's strategic location coupled with the ongoing improvements in infrastructure is believed to extensively promote the Country's comparative and competitive advantages in developing export oriented manufacturing sector, thereby opening up for lucrative investment ventures in this area.

Mineral Resources - Geological works and recent remote sensing investigations have proved that Eritrea possess favourable geological settings. The Eritrean green stone belt which hosts precious and base metal covers 70% of the country. The major mineral resources include: metallic-gold, silver, copper, zinc, iron, nickel, and chromium.

Industrial - potash, sulphur, gypsum, salt, silica, sand, feldspar, and kaolin

Construction-marble, granite, chalk, and basalt also deposits of oil and natural gas are believed to be promising.

Tourism - This sector has huge potential based on the scenic and topographic diversity of the Country as well as its history. The coastal line of pristine sandy beaches, the many islands and the clear water with abundant marine life makes development of recreational facilities, including hotels and restaurants a viable investment. There are also good investment opportunities aimed at developing the historical and cultural heritage of the Country.

Services - Given its strategic location Eritrea can offer competitive services in the region. As its infrastructure improves substantially the Country can be successful exporter of financial transport and tourism services. Eritrea has good potential for offshore banking and other financial services. It can also take advantage of growing demand for out-sourced services and products needed by large international companies.

Privatization - Eritrea's privatization programme of state owned enterprises is progressing smoothly. There is no special restriction on domestic or foreign buyers. For the Government rehabilitation and development of the potential of the privatized enterprises is the main concern. The program provides attractive investment opportunities for investors. At present, many state owned enterprises have been privatized and that are home ready for privatization.

Eritrea– India Relations 

Eritrea’s relations with India go back a long way. Indian traders had been trading at the Eritrean port of Massawa since the early part of the 17th century and there was a sizeable Indian presence in Eritrea at the turn of the 20th century. Approximately, 5000 Indian soldiers lost their lives at the decisive battle of Keren during the Second World War fighting Mussolini's fascist forces.

When Shri K Srinivasan, Secretary (West) visited Eritrea in September 1993, the Foreign Minister of Eritrea expressed his country’s disappointment at the lack of interest from India during Eritrean independence struggle. The purpose of Secretary (West)’s visit was to sign protocols with the Government of Eritrea to establish diplomatic and consular relations and ask for agreement for concurrent accreditation of the Indian Ambassador in Addis Ababa to Eritrea. Secretary (West) responded to Eritrean Foreign Minister’s remarks stating that “India’s attitude was not negative but neutral as we did not wish UN to take intrusive part in an established country’s internal affairs including that of India”. Formal recognition to the independent Eritrea was given by India in 1993.

Economic Cooperation: India established diplomatic relations with Eritrea soon after its independence from Ethiopia in 1993. India also assisted Eritrea in its Constitution-making process. Mr. Justice P.N. Bhagwati, former Chief Justice of the Indian Supreme Court attended a workshop of the drafting of the Constitution in Eritrea. Bilateral cooperation between India and Eritrea is evolving gradually, particularly through the mechanism of the Indian Technical and Economic Cooperation (ITEC) programme under which Eritrea has sent some of its diplomats for training in India. ITEC slots extended to Eritrea are not fully utilized. The Eritrean government has sought Indian help in deputation of experts in the fields of planning, industrial development, finance, human resources, agriculture, medical and education. The Indian mission has recently recommended assistance in terms of setting up of industrial training centre and deputation of TCIL and RITES personnel for cooperation in communications and railways.

A trilateral agreement between Eritrea, India and the FAO was signed in Rome on March 31, 1998 in terms of which nearly 100 Indian agriculture experts were deputed to Eritrea to help increase agricultural productivity and work in areas such as water control, crop production, small animal production, inland fisheries and aqua culture. India donated 1500 MTs of wheat and 200MTs of sugar to Eritrea as relief assistance. Recently, India donated 5,000 tonnes of wheat. Minister of Agriculture of the State of Eritrea visited India in June 2001 for enhancement of bilateral cooperation in the agricultural field. A 10-member delegation led by the Eritrean Minister of Transport and Communications visited India in August 2001 for a World Bank funded study tour.

Trade between India and Eritrea is on the increase. Indian firms have been supplying electric transmission lines and equipment, machinery and instruments, project goods, machine tools, three wheelers, drugs and pharmaceuticals, cotton yarn and fabrics etc. to Eritrea. India's exports stood at US$7.5 million and imports at US$0.6 million in 2002. The current trade level between India and Eritrea is US$8.17 million. Eritrea has also started recruiting Indian teachers for teaching in its primary and secondary schools. More than 350 teachers are presently teaching in various schools in Eritrea. In addition to nearly 50 professors, l00 professionals and technically trained personnel have also been employed at the University of Asmara.

Defence Links: During the years prior to independence, the Defence Academy was located at Asmara, the capital of Eritrea. The academy was set up and run by Indian defence personnel on deputation. Several Eritreans were trained in Indian Defence institutions prior to independence. Eritrea recognizes Indian Armed Forces as the most suited to offer training to its personnel and development/training. Several areas of cooperation with the Indian Armed Forces have been identified by the Eritreans.

Status of Bilateral Agreements: Indian Council for Agricultural Research and Eritrea Ministry of Agriculture signed cooperation agreement. Several other Agreements such as on setting up of Joint Commission for Political, Economic, Cultural, Scientific and Technical Cooperation, Economic, Industrial and Technical Cooperation, Education Exchange Programme, FOC, Cultural Exchanges and Tourism are under consideration

Indian Community: The Indian Community in Eritrea, which at one time numbered almost 2000, consisting mainly of Gujarati business persons, dwindled to less than 30 during the 30-year civil war. Following the recruitment of Indian teachers, professors, technical personnel and other professionals by the Eritrean Government/business houses, the number of the Indian community has now reached around 500.

Eritrea has an Embassy in New Delhi, but there is no resident Indian Mission in Eritrea. The High Commission of India in Nairobi looks after the interests of the Indian community in Eritrea. Eritrea is keen to have links with India in the field of tourism. The Eritrean Minister for Tourism conveyed Eritrea’s invitation to the Indian Minister for Tourism and Culture to visit Eritrea. Eritrea is especially interested in training of managers in the hospitality sector in which we may have a role to play. A large number of Eritreans visit India for medical treatment. There is scope for promotion of India as a health destination for Ertirea. The Government of Eritrea has also shown interest in production of generic drugs by Indian companies in Eritrea. July 2005

Eritrea Country Data