The earliest opposition to the Rana regime that departed from the conspiratorial politics of the palace began during the rule of Chandra Shamsher, a conservative who was not interested in modern political participation, even though large numbers of Nepalese soldiers had been exposed to new ideÍÍÍÍas during and after World War I. Just after the war, Thakur Chandan Singh, a retired army officer, started two weekly newspapers in Kumaon, Tarun Gorkha (Young Gorkha) and Gorkha Samsar (Gorkha World). At the same time, Devi Prasad Sapkota, a former officer in the Foreign Department, founded the weekly Gorkhali in Banaras. These journals were forums where Nepalese exiles could criticize the backwardness and repression of the Rana regime. During the 1930s, a debating society called Nagrik Adhikar Samiti (Citizen's Rights Committee) was founded in Kathmandu to discuss religious issues, but its discussions veered into politics. When one of its meetings featured a political speech denouncing the Rana regime, the government banned the debating society. By 1935 the first Nepalese political party, the Praja Parishad (People's Council), began among Nepalese exiles and set up cells within the country. In Bihar it published a periodical, Janata (The People), advocating a multicaste, democratic government and the overthrow of the Ranas. The Rana police managed to infiltrate the organization and arrested 500 persons in Kathmandu. Four leaders were executed (they were still were commemorated as martyrs in 1991), and others received long prison terms, but the survivors escaped to India to carry on their political agitation.

In India the British were having their own problems with an independence movement headed by the Indian National Congress, led by Mohandas K. Gandhi and Jawaharlal Nehru. Under Gandhi's leadership, the Indian National Congress pursued nonviolent campaigns of civil disobedience that mobilized millions, including members of all castes and women, into agitations for reform and the end of foreign rule. Simultaneously, there was a growth in terrorism and police repression that seriously destabilized all of South Asia. Lacking a British promise of independence, the Indian National Congress opposed participation in World War II (1939-45), but even with many of its leaders in jail during the war there was continuing public disorder and police violence. After the war ended, the British realized that their position in South Asia had become untenable, and they prepared to leave. With China in the middle of a communist revolution, their old allies the British preparing to leave India, and thousands of soldiers returning from abroad, the Rana government could no longer avoid making radical changes in Nepal.

Many of the Nepalese exiles in India had worked closely with the Indian National Congress during its struggles with the British, realizing that only after the elimination of its colonial support would the Rana regime fall. In Banaras in October 1946, a group of middle-class Nepalese exiles formed the All-India Nepali National Congress (Akhil Bharat 100iya NepNepali Rashtriya Congress). Many of its members were students who had agitated and subsequently had been jailed during movements in India. During its council in Calcutta in January 1947, the new organization dropped its "All-India" prefix and merged with two other groups, the Nepali Sangh (Nepalese Society) of Banaras and the Gorkha Congress of Calcutta, which had closer connections with lower-class Ranas. The Nepali National Congress (Nepali Rashtriya Congress) was officially dedicated to the ouster of the Rana dictatorship by peaceful means and to the establishment of democratic socialism. One of its first mass actions was participation in a labor strike in the jute mills of Biratnagar in the Tarai, which disrupted traffic at the Indian railhead in Jogbani, and required army intervention. Although this action garnered much publicity for the party and brought thousands of protesters into the streets even in Kathmandu, the strike was suppressed, and its leaders, including Bishweshwar Prasad (B.P.) Koirala, were imprisoned.

B.P. Koirala (1914-82) became the leader most closely identified with the Nepali National Congress. His father, a Brahman businessman, spent a good deal of time in Bihar and Bengal. He had become involved with political activists and progressive ideas, especially those of Gandhi, and participated in anti-Rana agitations including the publication of Gorkhali at Banaras. B.P. Koirala thus grew up in an atmosphere oriented toward radical Gandhian action. By 1937 he was studying law in Calcutta and had started working for the Congress Socialist Party. He was arrested in India a number of times and spent 1942 to 1945 in jail after instigating Nepalese soldiers to rebel against the government. His views during his early years, influenced by Gandhi, tended toward radical democratic decentralization and included cottage industries instead of large factories as models for economic development. His wing of the Nepali National Congress stressed nonviolent confrontation and general strikes, but he was not opposed to force should all other paths prove ineffective. He advocated a constitutional monarchy as a transitional political form for Nepal.

The strong-willed, conservative Juddha Shamsher resigned as prime minister in November 1945, passing on his job to Padma Shamsher, who announced that he was a servant of the nation who would liberalize the Rana regime. Padma Shamsher's repression of the Biratnagar strike, however, showed that he was not interested in the kind of political and labor reforms advocated by the Congress. In the aftermath of the repression, on May 16, 1947, he delivered a speech outlining important reforms, including the establishment of an independent judiciary, elections for municipality and district boards, expansion of education, publication of the national budget, and the formation of a special committee to consider plans for further liberalization. The Nepali National Congress called off its continuing agitations, and B.P. Koirala and other top leaders were released from detention in August. In January 1948, the prime minister announced the first constitution of Nepal, which set up a bicameral Parliament, a separate High Court, and an executive power vested in the prime minister who was to be assisted by a five-member Council of Ministers. Although this constitution reserved almost all powers for the executive branch and kept the same rules of succession as before for both king and prime minister, the Nepali National Congress agreed to function within its framework. Beset by conflicting forces from all sides, however, Padma Shamsher resigned his position in early 1948.

Data as of September 1991