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The release, described as a "goodwill gesture", comes days after President Asif Ali Zardari met Indian PM Manmohan Singh.
"We have released 26 Indian fishermen from our jail on the instructions of the government," Nazeer Husain Shah, superintendent of the Malir district told AFP.
Officials say at least 450 Indian fishermen are still in Pakistani jails, while India has over 150 Pakistani fishermen in its prisons.
Sindh Information Minister Shazia Marri said, "They have been released as a goodwill gesture."