In November 1965, the United Kingdom created a new colony, the British Indian Ocean Territory, from three island groups (Aldabra, Farquhar, and Des Roches) and the Chagos Archipelago (formerly a dependency of Mauritius). Aldabra, Farquhar, and Des Roches became part of independent Seychelles in 1976.
The chief island of the Chagos Archipelago is Diego Garcia, on which the United States maintains a naval base under an agreement with the British. The expressed intent of the United States to expand its naval base in order to strengthen the US military presence in the Indian Ocean and thereby secure the oil routes from the Persian Gulf was a sensitive international question in the late 1970s and early 1980s.
The Chagos Archipelago is located at 6° S and 72° E and covers a total area of 54,400 sq km (21,000 sq mi), although the land area is only 60 sq km (23 sq mi). Diego Garcia is both the largest island (44 sq km/17 sq mi) and the most southerly, lying nearly 1,770 km (1,100 mi) east of Mahé, the main island of the Seychelles; it is also the only populated island in the territory. The military installation there has military personnel and civilian contract employees from the United Kingdom, Mauritius, the Philippines, and the United States. The average temperature on Diego Garcia is 27° C (81° F ); annual rainfall ranges from 230 to 255 cm (90–100 in).
France took possession of the Chagos Archipelago during the 18th century but ceded it to the United Kingdom in 1814. It was administered as a dependency of Mauritius until 1965. Initially the archipelago was exploited for copra by slave laborers from Mauritius; after emancipation in the 19th century, they became contract employees. Some of them, now known as Ilois, stayed on and became permanent residents. The United Kingdom bought the copra plantations from the private owners in 1967 and decided to close them down; some 1,200 Ilois were removed to Mauritius during 1967–73. In 1982, after prolonged negotiation, the United Kingdom granted £4 million to the Ilois on Mauritius, whose government agreed to provide land worth £1 million for their permanent resettlement.
In 1980, the government of Mauritius demanded that Diego Garcia revert to its control, arguing that the United Kingdom had violated an understanding allegedly given in 1967 that the island would not be used as a military base. The UK government denied giving any such assurance. As of 1999, a military installation on Diego Garcia was under joint jurisdiction by the United States and the United Kingdom. In 2000, a British High Court upheld the military status of Diego Garcia. In 2002 there were 1,500 military personnel and 2,000 civilians living on Diego Garcia.