The Iran war has upended the process of transferring the archipelago’s sovereignty from the UK to Mauritius.

The Chagos Archipelago has been in the spotlight recently due to its relevance in the United States (US)-Israel-Iran conflict. The attention centres on the joint US-United Kingdom (UK) military base on the archipelago’s largest island, Diego Garcia, and its unsettled future.

The military base’s significance hinges on its strategic Indian Ocean location, near enough to the Middle East but out of range of Iranian missiles.

In October 2024, the UK agreed to cede sovereignty over the Chagos Islands to Mauritius, marking the end of a decades-long dispute over ownership. In May 2025, a formal agreement was reached. But what initially seemed a major diplomatic victory for the small island state has become a drawn-out geopolitical stalemate.

With the Iran war and the Diego Garcia base’s indispensable position in the region, Mauritius’ acquisition of the archipelago seems increasingly out of reach. Most recently, on 11 April, the UK announced the deal had been paused and wouldn’t proceed without US approval.

Central to this deadlock are four key actors with divergent motivations guiding their interest in the Indian Ocean islands: the US, UK, Mauritius and Chagossians themselves.

For the US, Chagos has become a fortuitous bargaining chip with the UK. The islands’ fate was thrown into doubt by US President Donald Trump’s negative comments on the UK-Mauritius agreement.

At face value, Trump’s objections are security-focused, hinging on the base’s importance for the balance of power in the Indian Ocean and the dangers of granting elevated access to Mauritius, a country with cordial relations with US adversaries like China.

In reality, the military base’s future is low priority for Trump. Rather, his criticism of the deal as ‘an act of great stupidity’ and ‘a big mistake’ is more strategic, intended to pressure the UK into supporting US objectives in other arenas.

Initially, Trump’s criticism emerged in apparent retaliation to UK Prime Minister Keir Starmer’s comments about Trump’s claim to Greenland. More recently, Trump’s withholding of support for Chagos has given him leverage to force UK compliance over the Iran conflict and, particularly, using UK military bases (including Diego Garcia) to launch attacks.

Both the UK and Mauritius want to ratify the agreement quickly, but for different reasons. For both, the primary motivation is less geopolitical and more national.

The preceding administration’s poor fiscal management has left Mauritius financially strained. The government promoted the Chagos cheque as essential for debt relief over the next few years. Mauritius could benefit from up to £165-million annually tied to a 99-year lease of Diego Garcia entered into by the UK.

Unlike Trump, Starmer’s administration has consistently affirmed that the Mauritius deal is key to the base’s long-term security, amid a shift in international opinion that places the UK’s continued ownership of the Chagos Islands under scrutiny. The African Union has backed Mauritius’ claim since 2010.

Starmer has stood firm against a rising Conservative Party backlash over what it termed a ‘surrender’ deal with limited benefit for the UK. If the deal’s ratification falls through now, it would be a notable optics failure for Starmer and his Labour Party and could erode public confidence in his administration, while leaving the UK open to further international pushback over its continued hold on the islands.

Complicating matters, the Conservative Party’s opposition against the deal has drawn on not only Trump’s negativity, but also Chagossians’ discontent, through their lack of trust in the arrangement. Some Chagossians – many living in the UK following a 1960s forced relocation scheme – say the deal doesn’t prioritise their interests.

Chagossians’ primary objective has long been to resettle on the islands; they say the deal offers limited guarantees to ensure this. As a small community of around 8 000, their leverage is limited. Nevertheless, their cause will continue to be championed by the UK opposition as evidence that the agreement doesn’t sufficiently benefit everyone.

With all actors stubbornly locked into their divergent positions, any hope of progress hangs on who will be the first to fold. However, control over the agreement’s destiny is not evenly proportioned.

Mauritius has little power to force the Trump administration to change its stance. Mauritius’ government could position itself as the more preferable of two options following a new claim over the islands from the Maldives, which has closer ties to China than Mauritius. In doing so, Mauritius could lobby for a speedy ratification of the agreement as the best way to secure the US’ long-term Indian Ocean ambitions.

However, with Trump’s about-face over the agreement having less to do with Diego Garcia’s security than with broader geopolitical leverage, success of this will likely remain limited.

A more solid strategy for Mauritius would be to threaten legal action against the UK over the deal’s delay. While the Starmer administration has refuted the need to compensate Mauritius for the deal’s failure, it wants to avoid a legal battle.

Pursuing a judicial case, through the Permanent Court of Arbitration or another international dispute mechanism, could urge the UK to act in one of two ways. Under sustained pressure, it could proceed with ratification without US support. Its reluctance to do so illustrates that the benefits of its special relationship with the US outweigh the importance of a concluded arrangement with Mauritius.

More likely, the UK will pressure the US to reissue a statement of support for the agreement. Given Trump’s evident inflexibility in response to threats, it would be easier for the UK to make concessions to the US – particularly regarding support for the Iran conflict – in exchange for renewed backing.

Still, the UK’s evident reluctance to proceed without US backing has given America significant leverage over the arrangement. Trump is unlikely to call for an outright dissolution of the deal; he has more to gain from keeping the possibility of renewed support in play. Yet he also won’t directly support the Chagos handover while that benefits him.

Without a more forceful approach from the UK and with limited leverage available to Mauritius, the Chagos Archipelago will likely remain in a state of geopolitical purgatory for now.

Written by Zoë McCathie, Country Risk Analyst, Signal Risk & Ronak Gopaldas, ISS Consultant and Signal Risk Director