However, he also appealed that the efforts of his 300-member Indian crew must be considered before hindering the release of the love saga, which faces a vandalism threat from right-wing Hindu outfits amid heightened tensions between India and Pakistan.
After a longstanding silence on the issue, Karan opened up in a video statement issued on his behalf on Tuesday.
In the video, he said: "Remained silent because of deep sense of hurt that I felt, that there are a few people who actually believe that I am being anti-national. I need to say this and I say this with strength that for me this country comes first," Karan said.
"Nothing else matters to me but my country. I have always felt that the best way to express your patriotism is to spread love and that is all I have done through my work."
He added: "When I shot my film ADHM in September to December the last year, the climate was completely different. The circumstances were completely different. There were efforts made by our government for the peaceful relationship between the nations and I respect those endeavours then, those efforts then and I respect the sentiment today. I understand the sentiments as I feel the same."
"Going forward, I would like to say that I will not engage with the talent from the neighbouring country in the circumstance but with that same energy I beseech you to know one thing that over 300 Indian people in my crew have put their blood, sweat and tears into my film and I don't think it's fair to them to face any kind of turbulence on account of other fellow Indagency."
His film has become the first target of those who are against inclusion of Pakistani artistes in Indian films after the September 18 Uri attack which killed 19 Indian soldiers in Jammu and Kashmir. The attack was followed by surgical attacks that India conducted on terror camps in Pakistan.
The subsequent bilateral unrest between India and Pakistan had a spill over in film industries on both sides of the border.
While the Maharashtra Navnirman Sena (MNS) issued an ultimatum to Pakistani artistes to quit India, the Indian Motion Picture Producers Association passed a resolution asking producers to avoid working with talent from Pakistan.
Just last week, the Cinema Owners and Exhibitors Association of India announced single screen theatres in Maharashtra, Goa and Gujarat won't screen Karan's ADHM. And the film is already facing threats from the MNS.
Earlier on Tuesday, filmmaker Mukesh Bhatt, President of the Film and Television Producers Guild of India, met a Mumbai police representative to ensure that the city's theatres which will screen ADHM remain safe and secure. The Mumbai police have promised protection.
Karan, who spearheads Dharma Productions -- one of the leading movie production banners of the Hindi film industry -- said he respects the Indian Army for "everything they do to protect us and our environment".
"I say I condemn any form of terrorism. I just hope you understand exactly the circumstance and situation that we are in and respect the fact that we love and respect our country over and above anything else," he added.
ADHM, which also stars Ranbir Kapoor, Aishwarya Rai Bachchan and Anushka Sharma in key roles, is releasing on October 28, two days before Diwali.