National Academy of Performing Arts' 'Mantorama' and Ajoka's 'Kaun Hai Yeh Gustakh' were scheduled to be staged on Thursday and Saturday respectively.
NSD cited "unavoidable circumstances" behind the cancellation of the two plays.
Both the plays were based on the life of famous Urdu writer Saadat Hasan Manto, whose birth centenary is being celebrated in India and Pakistan.
"We were informed by the higher sources about the cancellation and are now working on refunding the tickets. The Pakistani artistes are leaving today," a NSD official said.
The Karachi based group NAPA recently presented a musical excerpt from their play 'Mantorama' titled 'Manto aur Ghalib : Ek Guftagu' at the Kolkata Literary Festival before coming for the NSD festival.
While Lahore based Ajoka's play, which was to be staged in Jaipur earlier this week, also got cancelled there.
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The festival will screen three more plays based on Manto's work and life. The three plays -- 'Ik See Manto', 'Dafa 292' and 'Mantoiyat' -- are Indian productions.
NSD chairperson Amal Allana and director Anuradha Kapur could not be reached for their comments immediately.