The Natal Indian Organisation (NIO) was founded on May 4 1947 by A. I. Kajee and others who had left the Natal Indian Congress (NIC). The NIC had grown more radical in its attitude to apartheid after the Second World War and Kajee held moderate views.
Kajee, the former Secretary General of the South African Indian Congress (SAIC) had been replaced as President of the Natal Indian Congress (NIC), by Monty Naicker on 21 October 1945. Kajee had come under criticism for his moderate politics and close ties with Prime Minister Jan Smuts, especially after the founding of the NIO. Sir Syed Reza Ali termed this an '"unholy alliance" between a small section of "big Indian money in the Union and General Smuts" (quoted in a speech by Naicker before a NIC conference in June 1947.
"I say to the Natal Indian Organisation and the Transvaal Indian Organisation, that they must fold up their organisations at the present moment. They must come within the ranks of the legitimate organisations of the Indian people, of the Transvaal and Natal Indian Congresses. There is no time at the present moment for the Natal Indian Organisation and the Transvaal Indian Organisation. In asking for an interview with Dr. Malan they say that their organisation excludes communists. They have sunk to the lowest level. It means that they are saying to Dr. Malan "We are with you." Such a policy is not only a great danger to the Indian people; such a policy is suicide for the Indian community. There is no time for such organisations to exist at the present moment." l)
In 1963, later many of the founders of the NIO were nominated by the South African Government to form the South African Indian Council that was created to serve the Apartheid government on issues regarding Indians in South Africa.