Pakistan retaliated, shooting down two Indian aircraft Wednesday and capturing the pilot. India's defence officials later revealed that a Pakistani Air Force F-16 was also downed during a dogfight with IAF planes.
On the Indian side of the border, policemen and military personnel greeted Mr Varthaman who was dressed in civilian clothes, wearing a blue blazer and grey dress trousers.
India has demanded the release of a fighter pilot shot down by Pakistan warplanes in a major escalation between the two nuclear powers over Kashmir.
Pakistan, however, downplayed Tuesday's incident, saying Indian aircraft violated Pakistani airspace and that Indian jets "released a payload" hastily in a forest area after crossing the line of control.
Kashmir has been claimed by both India and Pakistan since nearly immediately after their creation in 1947.
"Our action is just to let them know that just like they intruded into our territory, we are also capable of going into their territory", he added. And we have some reasonably decent news. "That's the information I have", he said. I am happy that they have taken notice of the situation... "We are pleased that Pakistan is abiding by its global commitments".
However, late in the night, Pakistan conveyed to India that the pilot will be returned through the Attari-Wagah border and India's request could not be heeded to, the sources said.
BJP leader Subramanian Swamy on Friday said Pakistan Prime Minister Imran Khan is a "tape recorder" of the military and suggested it will be better for India to hold talks with their Army General than with him.More news: U.S.'s Pompeo urges India, Pakistan to avoid military action
Pakistan's airspace was closed on Thursday. Barricades were erected and additional officers were deployed in India's northern Punjab state, the Ludhiana District, the state of Gujarat and the desert state of Rajasthan.
Thai Airways cancelled almost 30 flights, affecting 5,000 passengers. Thai Airways later received permission to fly over China's airspace.
Indian paramilitary troopers stand guard during the second day of strike called by separatists against the National Investigation Agency (NIA) raids at residences, in Srinagar on Thursday.
Following the February 14 attack by a JeM suicide bomber on a CRPF convoy in Jammu and Kashmir's Pulwama causing the death of 40 troopers, the Pakistan Prime Minister had asked India to provide evidence to Islamabad to take necessary action.
The Pak Foreign Minister also said that Pakistan does not want to allow organisations to use its soil for objective of terrorism.
Pakistan's military later circulated a video of a man with a mustache who identified himself as the Indian pilot, sipping tea and responding to questions, mostly by saying, "You know I can't answer that".
The two sides briefly exchanged fire across the contested border in Kashmir on Thursday.