Swaraj House was formed in 1942 as a break-away group from the Committee of Indian Congressmen in Great Britain because of the pro-Japanese stance of A. N. Bose and P. B. Seal. The purpose of the organization was to provide a space where Indians would be able to meet freely and exchange frankly political ideas. It offered its premises to all Indians, in particular students, professionals, businessmen, workers, and seamen.

Swaraj House offered its members a reading room with newspapers from India and Britain as well as a library on India. It actively organized lectures, discussions and study circles on India and international affairs. It offered accommodation to Indian groups and organizations who needed it. It was financed through private donations and subscriptions. Swaraj House would also organize English classes for Indians as well as Hindustani lessons for those interested in learning the language. By 1945 it had a membership of seventy seven people; its influence had grown more in proprotion to its growth in membership. The organization was hampered by not having good Parliamentary contacts and it entered into a bitter rivalry with other Indian organizations in Britain to speak offically on behalf of the Indian National Congress. Swaraj House campaigned actively in India in support of the Indian National Congress and its leadership. Its other purpose was to look after the welfare of the Indian community in Britain, while also providing a central meeting place for Indians in London.

In 1943, Swaraj House made arrangements to stage a 'satyagraha' movement in London, to organize groups of around thirty Indian protesters to picket Whitehall and the Houses of Parliament to demand the release of Gandhi and othe Congress leaders. Swaraj House attempted to recruit 150 Indian workers from the Midlands, but the event was not realized as the organization could not secure sufficient support there and because Krishna Menon refused to endorse it. It tried to raise awareness of the famine in India in 1943, organizing a joint meeting with the Hindustani Social Club on 21 November 1943. It also campaigned actively for the release of Suresh Vaidya, one of its secretaries, after he refused to obey a military call-up notice in January 1944; the issue was subsequently taken up by the Independent Labour Party and its subsidiary organization the Indian Freedom Campaign. He was released in mid 1944.

In August 1946, Swaraj House purchased New Vision, the organ of the Independent Labour Party from Fenner Brockway, its former editor. The first issue appeared in October 1946 as India: A Nationalist Review of India Affairs, edited by N. Gangulee.

There were clear rivalries between the India League and Swaraj House. In 1946, Swaraj House was asked by Congress and Nehru to align itself more closely with the India League because of its political clout and close connections with British MPs. In a letter to the Secretary of the Organization, Nehru stated that Congress did not wish to be represented by Swaraj House in Britain, but by the India League. In late 1946, Krishna Menon pressed for the dissolution of Swaraj House as the India League was the offical representation of Congress in the UK. The organization also faced serious financial difficulties at the time and also had to confront serious in-fighting. Financial difficulties also arose with the publication of the first issue of India as many advertisers had not paid up. By mid 1947, the organization's importance was rapidly declining.