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New Delhi said if the reports of Azhar's location are correct, then Pakistan's 'duplicity' has been exposed.
Despite attempts by the PMSA vessel to evade, the ICG ship intercepted it and successfully negotiated the release of the seven fishermen.
He replaces South African Gary Kirsten ahead o fa tour of Zimbabwe.
Nabi has featured in 167 ODIs since 2009, scoring 3,600 runs in addition to picking up 172 wickets.
The Baloch Liberation Army (BLA), a separatist militant group, claimed responsibility for the attack.
27 others were injured as an autorickshaw carrying schoolchildren bore the brunt of the bomb.
Test coach Jason Gillespie will fill in for Kirsten in their limited-overs tour of Australia beginning next week.
Skipper Ben Stokes was the top-scorer for England with 37, but their frontline batters struggled against the turning ball.
New Zealand have qualified for the last-four at the expense of India.
It must be a shattering experience for Pakistan to lose two Tests within a span of two years after their batsmen had scored more than 550 runs in the first innings.
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