Jahanzaib Khaskhili of Tando Adam Khan area was arrested after Hindu community leaders lodged an official complaint, district police chief Farrukh Ali told reporters.
He said the offensive shoes have also been confiscated.
"We are also carrying out raids in the market to see if any other shop is also selling these shoes," he said, adding that initial investigations indicated that the shopkeeper had not deliberately tried to hurt the sentiments of Hindus.
If convicted, the shopkeeper faces a maximum of 10 years in prison, in addition to a possible fine.
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Pakistan Hindu Council (PHC) patron-in-chief Ramesh Kumar Vankwani told PTI that the swift police action was appreciated by the Hindu community.
Vankwani said police have found that the shoes were purchased from a manufacturer in Lahore and Punjab police were being approached for taking action against them.
It is unethical and immoral to insult any religion, either of a minority or a majority, he said.
The PHC had lodged protests with the Sindh government and authorities in Tando Adam Khan area after it was brought to the notice of the Hindu community that shoes were being sold with the sacred word 'Om' inscribed on them.
The PHC patron-in-chief said the sale of these shoes were an insult to the Hindus in Pakistan as it is blasphemous to use the sacred word 'Om' on shoes.
"It is most unfortunate that some shopkeepers in Tando Adam Khan are selling shoes on the occasion of Eid ul Azha with the Hindu sacred word inscribed on them and the purpose just appears to be to insult the sentiments of the Hindu community," Vankwani has said.
Local newspapers have reported that similar shoes were also being sold in some other places of the southern Sindh province, where a majority of the Pakistani Hindus reside.
Under Pakistan's blasphemy laws it is a crime to insult any religion and they have specific sections that carry life sentence and mandatory death sentence.