Mr. Oli dissolved Parliament about two years before its mandated five-year term was to end in order to head off an expected no-confidence motion by rival leaders in his party.
Mr. Oli was elected to a second stint as prime minister in 2017 by crafting a majority in an alliance with former Maoist rebels and promising to tackle the endemic corruption that plagues the country and forge stronger ties with China.
Nepal’s political turmoil comes amid rising tensions between China and India, two powerful neighbors whose rivalry has become increasingly strained. That has intensified as China has pressed its claims toward disputed land along their rugged border in the Himalayas.
During his tenure, Mr. Oli increasingly tilted toward China, at the expense of India.
Mr. Oli has initiated several major development projects as part of Chinese efforts to develop trade and transit links in the region, essentially ending what had been an Indian monopoly in the country.
“Oli’s exit could be a matter of satisfaction for India,” said Bipin Adhikari, former dean of Kathmandu University School of Law and a constitutional expert. A “weak coalition government could be more supportive of them than Oli.”