Published by Global Banking & Finance Review®
Posted on May 22, 2025
4 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe UK and Mauritius signed a deal on the Chagos Islands, securing a lease for the Diego Garcia base. The agreement faces criticism and legal challenges.
LONDON (Reuters) -Britain signed a multi-billion dollar deal on the future of the Chagos Islands with Mauritius after a last-gasp injunction was overturned, securing itself a lease for the U.S.-UK Diego Garcia air base for the next century.
Here are some key points about the islands, the deal and why it was contentious:
ISLANDERS DISPLACED
The Chagos Archipelago is a group of six atolls with more than 600 individual islands in the Indian Ocean, 500 km (300 miles) south of the Maldives and halfway between Africa and Indonesia.
Around 4,000 people are stationed on the islands now.
No indigenous inhabitants, often referred to as Chagossians or Ilois, have lived there since Britain forcibly displaced up to 2,000 people, mostly former agricultural workers, from the islands in the late 1960s and early 1970s to establish the Diego Garcia base.
Britain has since come under increasing international pressure to hand over control of the islands to Mauritius.
But a handover agreement reached last October has drawn criticism from lawmakers as well as Britons born on Diego Garcia.
THE DEAL
In October, Britain agreed to transfer sovereignty of the Chagos Islands to Mauritius, a former colony that gained independence in 1968.
On Thursday, Britain said it would pay Mauritius 101 million pounds ($136 million) per year - calculated to be worth 3.4 billion pounds over the lifetime of the deal - to secure the future of the Diego Garcia military base as part of that deal.
Despite the transfer of sovereignty, Britain will maintain control over the base under a 99-year lease.
The U.S., Canada, Australia, New Zealand and India backed the agreement, Britain said.
U.S. President Donald Trump backed the deal in February.
SIGNIFICANCE
The deal is significant due to the strategic importance of Diego Garcia, which serves as a key military base in the Indian Ocean for the U.S. and Britain. China also has a growing reach in the region, including close trade ties with Mauritius.
Recent operations launched from Diego Garcia include bombing strikes against Houthi targets in Yemen in 2024 and 2025, humanitarian aid deployments to Gaza and attacks against Taliban and al-Qaeda targets in Afghanistan in 2001.
UN COURT'S VIEW
In 2019 after a request by the United Nations General Assembly, the U.N.'s top court issued a non-binding ruling calling on Britain to give up control of the archipelago after wrongfully forcing the population to leave in the 1970s to make way for the U.S. base.
Britain split the archipelago off from its colonial island territory of Mauritius in 1965, three years before granting independence to Mauritius - minus the islands. The International Court of Justice said that split was unlawful.
CONCERNS
U.S. Secretary of State Marco Rubio raised concerns in February about potential threats to U.S. security, particularly in light of China's influence in the region.
Mauritian Prime Minister Navin Ramgoolam, who was elected after the initial agreement was reached, questioned it when he took office. Ramgoolam had wanted Trump to look at the plan and say whether it was a good arrangement.
Some Chagossians, many of whom ended up living in Britain after being removed from the archipelago, have protested against the agreement on the grounds that they were not consulted.
Kemi Badenoch, leader of the opposition in Britain, previously vowed to oppose the deal and has said it was not in Britain's national interest.
LEGAL CHALLENGE
A UK High Court judge issued a last-minute injunction on Thursday, halting the government's plan to sign the deal with Mauritius.
The injunction was sought by Bernadette Dugasse and Bertrice Pompe, British nationals who were born in Diego Garcia.
The pair have criticised the deal for excluding Chagossians.
The injunction was overturned hours later by Britain's High Court, clearing the way for the deal to be signed.
($1 = 0.7446 pounds)
(Writing by Sam Tabahriti; Additional reporting by Stephanie Van Den Berg; Editing by Hugh Lawson)
The deal is significant due to the strategic importance of Diego Garcia, which serves as a key military base in the Indian Ocean for the U.S. and Britain.
Concerns were raised about potential threats to U.S. security, particularly in light of China's influence in the region, and some Chagossians protested that they were not consulted.
Britain will pay Mauritius 101 million pounds ($136 million) per year, totaling approximately 3.4 billion pounds over the lifetime of the deal.
A last-minute injunction was issued to halt the signing of the deal, but it was overturned hours later by Britain's High Court, allowing the agreement to proceed.
In 2019, the U.N.'s top court issued a non-binding ruling calling on Britain to give up control of the archipelago after wrongfully forcing the population to leave.
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