Iqbal's second book in English, the Reconstruction of Religious Thought in Islam, is a collection of his six lectures which he delivered at Madras, Hyderabad and Aligarh; first published as a collection in Lahore, in 1930. These lectures dwell on the role of Islam as a religion as well as a political and legal philosophy in the modern age. In these lectures Iqbal firmly rejects the political attitudes and conduct of Muslim politicians, whom he saw as morally-misguided, attached to power and without any standing with Muslim masses.

Iqbal expressed fears that not only would secularism weaken the spiritual foundations of Islam and Muslim society, but that India's Hindu-majority population would crowd out Muslim heritage, culture and political influence. In his travels to Egypt, Afghanistan, Iran and Turkey, he promoted ideas of greater Islamic political co-operation and unity, calling for the shedding of nationalist differences. He also speculated on different political arrangements to guarantee Muslim political power; in a dialogue with Dr. B. R. Ambedkar, Iqbal expressed his desire to see Indian provinces as autonomous units under the direct control of the British government and with no central Indian government. He envisaged autonomous Muslim provinces in India. Under one Indian union he feared for Muslims, who would suffer in many respects especially with regard to their existentially separate entity as Muslims.

Sir Muhammad Iqbal was elected president of the Muslim League in 1930 at its session in Allahabad, in the United Provinces as well as for the session in Lahore in 1932. In his presidential address on December 29, 1930, Iqbal outlined a vision of an independent state for Muslim-majority provinces in northwestern India:

"I would like to see the Punjab, North-West Frontier Province, Sind and Baluchistan amalgamated into a single state. Self-government within the British Empire, or without the British Empire, the formation of a consolidated Northwest Indian Muslim state appears to me to be the final destiny of the Muslims, at least of Northwest India."

In his speech, Iqbal emphasised that unlike Christianity, Islam came with "legal concepts" with "civic significance," with its "religious ideals" considered as inseparable from social order: "therefore, the construction of a policy on national lines, if it means a displacement of the Islamic principle of solidarity, is simply unthinkable to a Muslim."

Iqbal thus stressed not only the need for the political unity of Muslim communities, but the undesirability of blending the Muslim population into a wider society not based on Islamic principles. He thus became the first politician to articulate what would become known as the Two-Nation Theory - that Muslims are a distinct nation and thus deserve political independence from other regions and communities of India. However, he would not elucidate or specify if his ideal Islamic state would construe a theocracy, even as he rejected secularism and nationalism.

The latter part of Iqbal's life was concentrated on political activity. He would travel across Europe and West Asia to garner political and financial support for the League, and he reiterated his ideas in his 1932 address, and during the Third Round-Table Conference, he opposed the Congress and proposals for transfer of power without considerable autonomy or independence for Muslim provinces. He would serve as president of the Punjab Muslim League, and would deliver speeches and publish articles in an attempt to rally Muslims across India as a single political entity. Iqbal consistently criticised feudal classes in Punjab as well as Muslim politicians averse to the League.