The first serious challenge to Congress hegemony came in 1967 when a new coalition, under the banner of the Samyukt Vidhayak Dal, won control over several states in the Hindi belt. Indira Gandhi (not related to Mahatma Gandhi), the daughter of Nehru, and Congress president, was then challenged by the majority of the party leadership. The conflict led to a split, and Indira launched a separate INC. Initially this party was known as Congress (R), but it soon came to be generally known as the "New Congress". The official party became the ભારતીય રાષ્ટ્રીય કોંગ્રેસ (Organisation) (INC(O)) led by Kamaraj. It was informally called the "Old Congress". As Indira Gandhi had control over the રાષ્ટ્રીય state machinery, her faction was seen as the official INC by the Election Commission of India, although her party was a break-away group.

The split can in some ways be seen as a left-wing/right-wing division. Indira Gandhi wanted to use a populist agenda in order to gather popular support for the party. She raised slogans such as "Garibi Hatao" (Remove Poverty), and wanted to develop closer ties with the Soviet Union, for strategic purposes. The regional party elites, who formed the INC(O), stood for a more conservative agenda, and distrusted Soviet help. INC(O) later merged into the Janata Party.

Gradually, Indira Gandhi grew more authoritarian and autocratic in her policies and outlook. Following allegations of electoral malpractice in the general elections, a court overturned Gandhi's victory in her parliamentary constituency in thr 1971 General Elections. Facing growing criticism and widespread demonstrations by opposition in the country, she proclaimed a state of રાષ્ટ્રીય Emergency in 1975, imprisoned most of her party's opposition, and unleashed a police state.

After she lifted the emergency in 1977, more Congress factions were formed, the one remaining loyal to Indira Gandhi being popularly known as Congress(I) with an 'I' for Indira. Congress(I) was routed in the general elections by the Janata Party, but the resulting coalition government lasted for two years, much shorter than the INC's long dictatorship. The Congress party returned to power in the ensuing 1980 elections. In 1984 Indira Gandhi was assassinated by two of her Sikh bodyguards, in revenge for the disastrous Operation Blue Star. In the following days anti-Sikh riots broke out in Delhi and elsewhere in which more than six thousand Sikhs were killed, purportedly by activists and leaders of the Congress Party.

Economic policy
K Kamaraj
Organisational Structure
Indira Gandhi