The Muslim response to colonialism has varied country to country and region to region. The dawn of colonialism created ruptures in Muslim political reasoning, forcing them to find and reconfigure an Islamic response to the changing political realities. The Indian subcontinent never came under an Islamic Caliphate of the Umayyad or Abbasid Empires. Most military expansionist ambitions in India stemmed from the volatile Central Asian Khanates who played a major strategic role between the Caliphate and Indian subcontinent, preventing the Caliphate from controlling India directly and maintaining an advanced independent politics. This paper profiles the political context of Muslim political thought and its response to the rise of nation-state, which was shaped more of political realism, setting aside the Islamic vocabularies of Dar al Islam or Dar al Harb. This paper concludes that, the South Asian Muslim mind had accepted nation-state either in its composite or in a distinctively Muslim format which resulted in the two nation-states of India and Pakistan. Both formats have evolved within a strong Islamic context that challenges Pakistan's "Islamic credentials" against India.