Its deep-water harbor, long runway and isolated location make it an ideal military hub. The base allows Washington to project power across vast stretches of the Indian Ocean while remaining relatively secure from potential adversaries. As tensions with China rise over Taiwan, Diego Garcia has become increasingly important to American defense planners.
From Colonial Possession to International Dispute
The origins of the dispute date to 1965, when Britain detached the Chagos Archipelago from Mauritius, then still a British colony, three years before Mauritian independence. The move enabled London and Washington to negotiate an agreement that would transform Diego Garcia into a strategic military outpost.
In 1966, Britain granted the United States access to the island. Over the following years, the entire local population of roughly 2,000 Chagossians was removed and relocated mainly to Mauritius and the Seychelles to make way for the military base.
For decades the issue attracted limited international attention. That changed in the 2000s as displaced Chagossians launched legal challenges seeking compensation and the right to return. Mauritius also intensified its sovereignty claim, arguing Britain had illegally separated the islands before independence.
The dispute reached a turning point in 2017 when the UN General Assembly referred the matter to the International Court of Justice (ICJ). In 2019, the court concluded that Britain’s continued administration of the islands was unlawful and that Mauritius’s decolonization had not been properly completed. The UN General Assembly subsequently voted overwhelmingly in favor of Mauritius’s claim.
Facing mounting diplomatic pressure, Britain entered negotiations with Mauritius that led to a political agreement announced in October 2024. The process culminated in a formal treaty signed on 22 May 2025, under which Britain agreed to transfer sovereignty over the Chagos Archipelago to Mauritius while securing continued operation of the Diego Garcia military base through a 99-year lease arrangement.
The agreement quickly became controversial. Critics argued Britain was surrendering strategically important territory, that it would have to pay billions to Mauritius as part of the deal and that the ICJ judgment was not legally binding.
Chagossian groups complained they had been excluded from negotiations over their homeland. Some Chagossian organizations argued that their right to determine the future of the islands had been overlooked. To argue in favor of Chagossian independence can lead to imprisonment in Mauritius.
Starmer's Controversial Agreement
Although negotiations began under the last Conservative government, the dispute moved to the center of British politics under Labour Prime Minister Keir Starmer, whose government sought to finalize the transfer of sovereignty to Mauritius.
Starmer, a former human rights lawyer, argued that a settlement was necessary to bring Britain into line with international legal rulings and to eliminate uncertainty surrounding the military facility. Government officials warned that failing to reach an agreement could expose the base to prolonged diplomatic and legal challenges.
They argued that failure to agree a deal could lead to Mauritius taking legal action using tribunals, like the International Tribunal for the Law of the Sea, where Britain would have no realistic prospect of success. That in turn could undermine operations at Diego Garcia, preventing access to the island or undermining satellite communications.
But the arrangement also carries a substantial financial cost. Under the agreement, Britain would lease back Diego Garcia after transferring sovereignty. Official estimates place the cost at roughly £3.4bn ($4.5bn) over the life of the arrangement in 2025 prices, although critics cite substantially higher figures when inflation and future adjustments are included.
The projected cost has become a major line of attack for the Conservative opposition and Reform UK. They argue that Britain is paying Mauritius for continued access to territory it has administered for decades, describing the arrangement as one of the most expensive territorial settlements in modern British history.
Legal experts like Yuan Yi Zhu have pointed out that not only is the original judgment non-binding, but any legal actions at tribunals would lack enforcement power without British consent. By handing sovereignty to Mauritius, a Chinese ally, Western power could be undermined. Leasing the base is inherently less secure than retaining sovereignty. It is also possible that the uniquely protected ecosystem in the Chagos Islands could face exploitation and damage by the Mauritians, who have failed to demonstrate concern for the environment.
Trump Reopens the Debate
The controversy surrounding Starmer's agreement has taken on a new dimension following a shift in Donald Trump's position.
When the treaty was signed in 2025, the agreement initially received support from Washington, with senior US officials viewing it as a way to secure the long-term future of the Diego Garcia base without having to pay the bill. However, Trump later reversed course and began publicly criticizing the arrangement, arguing that the transfer could undermine Western strategic interests in the Indian Ocean.
The change in position has complicated Britain's efforts to implement the treaty. By 2026, uncertainty had emerged over whether the agreement would proceed according to the original timetable, with questions raised in both London and Washington about its long-term viability.
Recent media reports have suggested that some figures within the Trump administration have discussed whether the United States could seek direct control of the islands should sovereignty eventually pass to Mauritius. Such discussions remain speculative and do not constitute official US policy. Nevertheless, they reflect growing concern within parts of the American security establishment about China's expanding influence in the Indian Ocean.
For Washington, the dispute is increasingly viewed through the lens of strategic competition with China. The Indian Ocean has become a critical theater in the broader contest for influence across the Indo-Pacific, and Diego Garcia remains one of the most important military facilities available to the United States outside its own territory.
As a result, what began as a dispute over colonial history and international law has evolved into a broader debate about the future balance of power in the Indo-Pacific.
More than 60 years after Britain separated the islands from Mauritius, the Chagos Archipelago remains disputed. Rather than closing the debate, the proposed settlement has opened a new chapter in one of the world's most enduring territorial controversies.
