"Considering that Pakistan is the Twenty20 champion and the rating of players like Shahid Afridi is very high, the fact that none of them were considered by IPL is being perceived in Pakistan as a part of a collective decision in retaliation to Mumbai attacks," Imran said.
"Mumbai incident was condemned across the board but somehow since then things have deteriorated on the sports field. We have seen the deterioration," he added.
None of the 11 Pakistani cricketers put up for auction on Tuesday found a buyer in the high-profile Twenty20 event, causing an outrage in the neighbouring country.
Imran said the IPL snub is a reflection of the deteriorating diplomatic ties between the two countries.
"The biggest sufferer of terrorism today is Pakistan. There have been 500 blasts in Pakistan in 2009. The Pakistani government blames India for terror in Balochistan just as Indian government blames Pakistan," Imran told 'Headlines Today'.
"Clearly there will be a corresponding desire in Pakistan to get back at India. They will cut down further sporting ties with India. It was actually quite humiliating in a lot of ways for the Pakistani cricketers," he added.
Former India captain Kapil Dev said the furore could have been avoided had the IPL officials displayed some tact in dealing with the matter.
"Last year IPL snubbed the Indian government and went and played in South Africa. I am disappointed Pakistani cricketers are not playing. But this only to be blamed on IPL not to anybody else, certainly not the government," he said.