The release of the family, which includes three men, two women and a minor girl, comes after Pakistan released over 300 Indian prisoners from its jails in April.
India’s Border Security Force (BSF) handed over the Pakistani citizens to officials at the Wagah border crossing.
The Pakistani high commissioner played a pivotal role in securing the family's release.
Nawab Khan and his family - all residents of Karachi - had travelled to New Delhi where they were arrested upon expiration of their visas.
India frees 13 Pakistani prisoners in reciprocal gesture
The two arch-rival nations exchange a list of prisoners every year on January 1, as per a mutual decision taken on May 21, 2008.
According to the list this year, various jails in India had 347 Pakistani prisoners, while Pakistan had 537 Indian prisoners in jail.
On April 4, India released two Pakistani prisoners — Mohammad Shafiq and Mohammad Hanif — and allowed them to cross over via the Wagah border.
Both Shafiq, a resident of Bahwalnagar, and Karachi native Hanif had served their sentences in Indian jails.
Prior to that in May, New Delhi released 13 Pakistani inmates who completed their jail terms.
The released prisoners included four fishermen who illegally entered Indian waters. At least three of the prisoners released were detained in India for overstaying their visas.
Earlier this year, Pakistan's Foreign Office had announced to release 360 Indian prisoners in four batches, scheduled as 100 each on April 7, April 15 and April 22 while 60 prisoners, including five civilians, were to be freed on April 29.
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