The film was released at the time of the Kargil conflict when tensions between India and Pakistan were high. The film was critically praised and was commercially successful at the box office. The film won the National Film Award for Best Popular Film Providing Wholesome Entertainment, the Filmfare Critics Award for Best Film, and was screened at the International Film Festival of India. The film was remade in Kannada as Sathyameva Jayathe with Devaraj and in Telugu as Astram (2006) with Vishnu Manchu and Anushka Shetty.
Arms trafficking is taking place in India. An arsenal enters Indian territory via the state of Rajasthan, which makes its way to interior of India with help of many middlemen. Bala Thakur, a gun handler in Chandrapur, provides the arms to Veeran, a forest dwelling brigand. Later, Veeran and his gang attack a wedding bus, mercilessly gunning down every person in it which includes women and children. The government appoints a Special Action Team in Mumbai to trace the roots behind the attack. The team learns about Bala Thakur, but thanks to his informants, Thakur flees before he can be apprehended.
Meanwhile, ACP Ajay Singh Rathod (Aamir khan), a resident of Mumbai, is attending a concert by the famed ghazal singer Gulfam Hassan (a Muhajir), where he spots a familiar face, Seema (Sonali Bendre). Ajay had a crush over Seema when they were studying in Delhi, but never got the courage to propose to her. The duo are happy to meet each other again and gradually fall in love. Gulfam, on the other hand, is Indian by birth, but had to move to Pakistan as a child during partition. Deeply scarred due to the experience, he is still happy that the Government allows him to live in his palatial residence whenever he comes to India. Gulfam finds a huge fan in Ajay, who used to attend his programs as a child. Despite the age difference, the two bond.
Inspector Salim a Muslim inspector is taken off from the Special Action Team when a notorious gangster Sultan escapes his clutches and he is severely reprimanded his superior for this failure and for cuing the death of three other officers in the attempt. Despite being an honest and upright police officer with the best intelligence gathering network in the force, Salim is rueful that he is being given second class treatment because he is a Muslim and is being perceived as having let Sultan escape because he was a Muslim as well. His anger at the system doesn't lessen when Ajay, who was his junior, is told to head the team. Ajay wants Salim on the team, but Salim refuses. It is revealed that Ajay's father was going to testify against some terrorist who had threatened him not to testify, but in an attempt to stop them from doing so, Ajay's elder brother was killed. Ajay's father was kidnapped and by the time the terrorists spared him, the man had lost his voice. This motivated Ajay to join the police force.
Unknown to Ajay, Gulfam is also working for the Pakistani intelligence which is attempting to create havoc in India and create a proxy war between both sides. Since Gulfam likes Ajay, he sees to it that nothing untoward happens to him. Here, Salim finds the location of Bala Thakur along with the information that Sultan, the man who escaped from his clutches, will also be there. Salim gives the information to Ajay who makes peace with Salim and convinces him to join the team again. An encounter at the criminals' rendezvous results in the death of Bala Thakur and Ajay is seriously injured. Though Sultan and his right-hand man Shiva manage to escape, the operation is deemed a success as the team is able to intercept a large consignment of lethal arms and ammunition meant for terrorist Veeran and his terrorist acts around the country. Sultan is later assassinated on Gulfams orders because of his failure and false information is leaked that he has escaped to Pakistan.
While recuperating, Ajay has an epiphany which leads the team to Bahid in Rajasthan and to "Mirchi Seth" Rambandhu Gupt. The investigative team save for Ajay and Salim camp in Bahid and gather all possible information on Mirchi Seth. Ajay comes over to Bahid to investigate and meets Gulfam who is temporarily staying in his ancestral manor near Bahid. Gulfam attempts to derail the investigation through political means and ordering an assault on Ajay to subvert the investigation, but of no avail. The repeated failures on Gulfam's part displease the senior officers in Pakistani Intelligence, who dispatch Major Aslam Baig to take care of the business.
Here, Ajay goes through the information collected so far and realises that he has seen many key suspects near Gulfam, but fails to make the connection. The investigative teams prepares for a final assault on the gun-running operation and in the pursuit of Mirchi Seth land up at Gulfam's mansion. Ajay feels betrayed when he learns of Gulfam's treachery, but is aware of lack of substantial evidence to indict Gulfam for his crimes. He goads and tricks Gulfam into killing Baig and arrests him for the offence. After realising what happened, Gulfam reveals how the incidents that happened during the partition embittered him and why he did those deeds.
In retaliation, Ajay makes him realise that his actions are not benefiting people of any religion. After Ajay makes him see the error in his ways, Gulfam, unable to stand the humiliation and guilt, commits suicide. Gulfam's suicide is hushed up and the team returns triumphant to Mumbai to much accolades for busting the terrorist racket. At Mumbai Airport, Salim is tipped on the whereabouts of Veeran and Ajay embarks on another investigation with his team.
Upon theatrical release, Sarfarosh received praised by the critics. Naseeruddin Shah was specially praised for his role of a Muhajir. The reviewer for Filmfare rated the film four out of five and wrote, "What makes this film so exceptional is its carefully thought out characterization and brilliant performances. Although this is his first film, director John Mathew Matthan draws perfectly crafted outputs from his entire cast. Aamir brings the role of A.C.P. Rathod to a never-before-seen dimension of reality." He further added, "Sarfarosh succeeds in connecting with the audiences, as it manages to transcend its medium and do a great deal more than just entertain." Suparn Verma of Rediff.com felt that the film "manages to marry serious cinema with the commercial variety" and wrote that the "script has this no-nonsense look to it, clearly and succinctly establishing the protagonist's past ..." In addition to commending the acting performances of Aamir Khan, Sonali Bendre and Naseeruddin Shah, he lauded the departments of direction, music, choreography, and called the camerawork "good in parts but lack[ing] technical finesse".National Film Awards
National Film Award for Best Popular Film Providing Wholesome Entertainment
Filmfare Critics Award for Best Movie – Cinematt Pictures – John Matthew Matthan
Filmfare Award for Best Editing – Jethu Mundul
Filmfare Award for Best Screenplay - John Matthew Matthan
Filmfare Award for Best Dialogue - Pathik Vats & Hriday Lani.
The film's music was composed by Jatin Lalit. Lyrics are penned by Israr Ansari, Nida Fazli, Sameer, and Indeevar.
All lyrics written by Indeevar, Israr Ansari, Nida Fazli, Sameer; all music composed by Jatin-Lalit.