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It was a part of a political movement originating in the 1940s outside India with the purpose of allying with the Axis powers to free India from British rule. It was established by Indian nationalists in exile during the latter part of the Second World War in Singapore with monetary, military and political assistance from Imperial Japan. Founded on 21 October 1943, the government was inspired by the concepts of Subhas Chandra Bose who was also the leader of the government and the Head of State of this Provisional Indian Government-in-exile. The government proclaimed authority over Indian civilian and military personnel in Southeast Asian British colonial territory and prospective authority over Indian territory to fall to the Japanese forces and the Indian National Army during the Japanese thrust towards India during the Second World War. The government of Azad Hind had its own currency, court and civil code, and in the eyes of some Indians its existence gave a greater legitimacy to the independence struggle against the British.

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