Background :- US military Base in Indian ocean. In the 1960s, the Chagos archipelago was secretly leased to the United Kingdom and detached from Mauritius with the intention of expelling its entire population and establishing a military base. In 1971 the United Kingdom and United States entered an agreement under which the latter would set up a military base in Diego Garcia. Location:- The island is located in the Indian Ocean, about 1,600 km (1,000 mi) south of the southern coast of India. The closest other countries to Diego Garcia are Sri Lanka and Maldives.