The review paper describes the application of image processing techniques for automatic detection of eye diseases. Large percentages of people suffer from eye diseases in rural and semi urban areas in India as well as world over. Image processing techniques greatly help diagnosing various eye diseases. Current diagnosis of retinal disease relies strongly upon optical imaging methods due to the photon sensing nature of the eye over a wide band of wavelengths. The key image processing elements to detect eye diseases include image registration, fusion, segmentation, feature extraction, enhancement, pattern matching, image classification, analysis and statistical measurements. In developing and under developing countries large number of people are suffering from ophthalmic diseases like Glaucoma, Age related Macular Degeneration (AMD), Diabetic Retinopathy, Diabetic hypertension. A large deficit of ophthalmologists exists in these regions. Year after year the number of medical assistants is decreasing, while demand for healthcare is increasing and expected to touch 40% by 2020. Low cost instrumentation with internet and mobile enabled network connectivity with above techniques can help patients in rural and semi urban areas to access well equipped and sophisticated hospitals in cities .