Before his plane was hit, he had shot down a Pakistani F-16.
Pakistan's foreign minister Shah Mehmood Qureshi said the country had acted with prudence in releasing the pilot.
The handover took several hours, delayed because of procedures including a quick check of his medical condition before he was turned over to Indian officials. The External Affairs Ministry also exerted pressure on Pakistan through the Arab world, they said.
Ahead of the pilot's return, Pakistan released a video where Varthaman appeared to praise the Pakistani military's professionalism.
On the Pakistani side, officials said a boy died after heavy firing from Indian troops late on Friday night.
Wing Commander Abhinandan returned to India slowly walking through Attari-Wagah border, where common people, mediapersons, security personnel and some of the high ranking military officers waited anxiously braving rains for his safe homecoming.More news: YouTube suspends comments on videos with minors
There were, however, conflicting reports on whether he has already crossed over to India.
What led to this moment?
India has so far been able to prove anything and whatever proofs Indian media has presented, have only backfired and made its entire narrative a laughing stock. "Jai Hind." Wing Commander Abhinandan had ended up in Pakistan's territory after his plane crashed in their borders.
India and Pakistan have fought three wars over Kashmir since their independence from British rule in 1947. All but one were over Kashmir. They added that heavily armed Indian troops "indiscriminately targeted border villagers" along the Line of Control. Partial operations have now resumed at four main airports, with the full resumption of flights expected next week. Since all aid and support has already been stopped, no further action may be taken, barring the fact that they may speak against Pakistan in global forums, B K Pandey also adds.
On Wednesday he pushed for talks with Delhi to prevent the risk of a "miscalculation" between the nuclear-armed neighbours.
Before the pilot was released, Pakistani television stations broadcast video of him, looking cleaned up and thanking the Pakistani Army for treating him well.
Pakistan's military said two of its soldiers were killed in an exchange of fire with Indian forces near the Line of Control that separates Kashmir between the rivals.