In a statement, Pakistani Interior Minister Chaudhry Nisar Ali Khan said that first Modi should "decide where Dawood is living".
The statement came against the backdrop of assertions by Modi that he will bring back Dawood from Pakistan if he comes to power.
Khan said "this provocative and condemnable statement of expected Prime Minister of India and leader of major political party is touching last limit of enmity towards Pakistan," state-run APP news agency reported last night.
The Interior Minister said those who are giving statements that Pakistan is sheltering Dawood and launching operation on Pakistan soil "should realise that neither Pakistan is a weak country to be afraid of such threats, nor Pakistani nation can be impressed with such irresponsible statements."
He said Pakistan's efforts for peace in the region should not be considered its weakness. Modi had recently accused Home Minister Sushilkumar Shinde of giving media statements instead of acting against Dawood Ibrahim.
Reacting to questions about Shinde's statement that India would bring back Dawood from Pakistan, Modi said, "Can such things be achieved through media. Are these things to be revealed through newspapers. Did Americans talk with bin Laden? Did America hold a press conference on its plans about tracking down bin Laden?
"What has the government done? They don't have mininum maturity. I am ashamed that the Home Minister made such statements," Modi said.
Dawood, accused of masterminding the 1993 Mumbai serial blasts and a number of other terrorist acts in the country, is India's most wanted fugitive.
He is believed to be staying in Pakistan. India has sought his extradition but attempts to bring him back to India did not fructify due to Pakistan's non-cooperation.