Fanaa was one of the most expensive Bollywood films at its time of release. The film's title is derived from the Islamic Sufi term fanaa, meaning "destroyed". Khan and Kajol were paired romantically opposite each other for the first time, but it marked their second collaboration after Ishq (1997). It also marked the comeback of Kajol, who was last seen in Karan Johar's family drama Kabhi Khushi Kabhie Gham... (2001).
Zooni Ali Beg is a blind Kashmiri woman who travels for the first time, to New Delhi, with her friends, Fatima "Fatty" Ali, Mehbooba "Bobo" Siddiqui, Rubina "Ruby" Ansari and their dance teacher Helen to perform in a ceremony for Republic Day. On her journey, she meets Rehan Qadri , a tour guide who flirts with her. Although her friends warn Zooni about him, she falls in love. On her last night in Delhi, Rehan and Zooni spend the night together, end up in bed and made passionate love to each other. As Zooni is leaving the next day, Rehan comes and takes her away with him. Her parents arrive in Delhi to make arrangements for their wedding. Zooni undergoes a surgery to get her eyesight back, but when she comes out of surgery, she finds out that Rehan was killed in a bomb blast in the city.
Malini Tyagi is a special intelligence agent brought in to assess the threat of the bomb blast, and the group responsible, an independent organization fighting for an independent Kashmir known as IKF. It is revealed that Rehan is the man who orchestrated the bomb blast, then faked his death so that Zooni wouldn't come looking for him. He admits that he loves Zooni, but also concedes that he can never see her again because of his dangerous life.
Seven years later, Rehan is on another mission for the IKF, which has acquired a nuclear weapon but needs to get hold of the trigger, known to be in the army's possession. Rehan steals it, but Tyagi has figured out his plan and sends forces to stop him. In the ensuing shootout, Rehan is injured. He makes his way to a remote house for help. It turns out to be Zooni's house. Zooni had become pregnant after Rehan's supposed death and has given birth to and raised their son (also named "Rehan" by Zooni). Zooni's mother had died two years prior to Rehan's return. Zooni and her father save him, though neither recognizes him as Zooni's old lover. Though initially distant from them, Rehan develops an affection for his son and the family.
Rehan eventually reveals his true identity to them, keeping the information of his terrorism under wraps. Initially hurt, Zooni refuses to let Rehan leave her again, and the two of them get married by with Zooni's father presiding. Tyagi has a report published about Rehan, warning the public that he is a terrorist. Zooni's father sees this report and confronts Rehan on finding the trigger in his pocket. Rehan accidentally throws Zooni's father off a ledge, killing him. He radios the IKF from an army officer's house but kills the officer when he discovers Rehan.
Zooni finds her father's body, and realizes Rehan lied about his death. Zooni later sees the news report, and finds the trigger. She takes her son and flees to the officer's house, where she radios for help. Tyagi tells her to stop Rehan. Rehan arrives the next day, and takes the trigger from Zooni, saying the IKF will kill her and their son if he doesn't. As Rehan is about to give the trigger to the leader of IKF, Rehaan's maternal grandfather, Zooni shoots him in the leg. Rehan draws his gun on her, but can't bring himself to shoot. Zooni shoots him again, this time fatally, to stop him. In the nick of time, Tyagi arrives and stops the IKF from shooting Zooni. Rehan dies in Zooni's arms.
Zooni and her son later visit the graves of her father and Rehan, who are buried next to each other. When her son asks if his father was wrong, Zooni tells him that his father did what he thought was right.
Initially, producer Aditya Chopra wanted to cast Aishwarya Rai as Zooni, but he and director Kunal Kohli approached Kajol on Khan's suggestion. Despite simultaneously being offered Kabhi Alvida Naa Kehna (2006) with frequent collaborators and friends Karan Johar and Shah Rukh Khan, Kajol chose to do Fanaa, thus marking the first film in which she was romantically paired opposite Aamir Khan, after having starred together in Ishq (1997).
Fanaa was originally planned to be shot in Kashmir before Kajol backed out due to the continuing insurgency in that region. The director choose to move the Kashmir segment to the Tatra Mountains in southern Poland, which also provides suitably snowy and mountainous terrain.[6] It was filmed at historical locations in Delhi including the Red Fort, Jantar Mantar, Qutub Minar, Purana Qila, Rashtrapati Bhavan and Lodhi Gardens.[7]
While promoting the film in Gujarat, Aamir Khan made some comments regarding the Gujarat Chief Minister Narendra Modi's handling of the Narmada Dam and the necessity to rehabilitate the displaced villagers.[28][29] These comments were met with outrage from the Bharatiya Janata Party. The government of Gujarat demanded an apology from Khan. Khan refused to apologise, saying "I am saying exactly what the Supreme Court has said. I only asked for rehabilitation of poor farmers. I never spoke against the construction of the dam. I will not apologise for my comments on the issue."[30] An unofficial ban of Fanaa was put in place for the entire state of Gujarat. Protests occurred against the film and Khan which included the burning of posters of the star in effigy. As a result, several multiplex owners stated that they could not provide security to customers. Thus, all theatre owners in Gujarat refused to screen the movie.[31]
Producer Aditya Chopra moved a petition to the Supreme Court of India asking them to direct the Gujarat government to provide protection to all cinema halls that wanted to screen the film, but was rejected.[32] Their response was that if a cinema was concerned for their protection they could call on the police. Aditya's father Yash Chopra in the meantime also sought protection from then-Chief Minister Narendra Modi as well as open discussions to release the film in Gujarat without any disruption. Khan also received support from a number of Bollywood stars including Anil Kapoor, Govind Nihalani, Ashutosh Gowariker and Subhash Ghai as well as Anupam Kher and Hrithik Roshan all of whom reiterated that Khan had done no wrong in expressing his views.
Addressing the media, director Kunal Kohli said, "All theatre owners or exhibitors who wish to release this film can request for protection and the government should extend support. We as filmmakers request all theatre owners of Gujarat to come forward and release the film. We have earned 470 million (both domestic and overseas) in the first week and have lost approximately 6 to 70 million of business in Gujarat. However it's not about money... it is about a principle. As a democratic country where Aamir has a right to say what he feels, even the people of Gujarat, who are protesting have the right to say what they feel ... but in a democratic fashion, and not by burning posters and threatening people."[33]
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