In 1997, he launched his son Akshaye Khanna in Himalay Putra in which he also starred alongside him. In 1999, Vinod Khanna received a Filmfare Lifetime Achievement Award for his contribution to the industry for over three decades. Since then, he started playing character roles in films such as Deewaanapan (2002), Red Alert: The War Within, Wanted (2009), Dabangg (2010) and Dabangg 2(2012). In 2007, he starred in the Pakistani film Godfather.
In 1997, Khanna joined the Bharatiya Janata Party and was elected from Gurdaspur constituency in Punjab in the next year's Lok Sabha poll. In 1999, he was re-elected to the Lok Sabha from the same constituency. Later, he became union minister for culture and tourism in July 2002. Six months later, he was moved to the Ministry of External Affairs (MEA) as Minister of State. In 2004 he won re-election from Gurdaspur. However, Khanna lost out in the 2009 general elections. In the 2014 general election he was again elected for the 16th Lok Sabha from the same constituency. No other Bollywood star has triumphed in four Lok Sabha polls (1998, 1999, 2004 and 2014). He also served as Union minister of state for tourism and culture, as well as external affairs.