Amir Khusru is so important to the development of qawwāli that he is often (erroneously) said to be the inventor of it.  It is said that he mixed the various musical elements from Turkey, greater Persia and India together.  Even today, we find the curious mixture of Persian moqquams with Indian rags.  

The development of the qawwali up to the latter part of the Mogul empire closely parallels the development of the Hindu religious song known as bhajan.  We find parallels in musical form and social settings.  The degree of cross influence is so great that some musician / saints such as Kabir (circa 1440-1518) are to this day revered by Hindus and Muslims alike.  

The tradition of qawwāli has had numerous ups and downs.  One particularly hard time was during the reign of Aurangzeb.  Aurangzeb is known for his Islamic fundamentalism.  The liberal traditions of the Sufis were not well received by this emperor.  He took the fundamentalist injunction against music very seriously.  Aurangzeb's dislike of music is well illustrated in a common story.  It appears that during his administration a group of musicians, disheartened with their lack of patronage, took some musical instruments and wrapped them in the manner of a corpse and held a funeral procession in protest.  Aurangzeb enquires about the procession and is told it is a burial to signify the death of music.  Whereupon it is said that the emperor declares, "Good! bury it so deep that never a sound should be heard again.