Earlier, an Indian production was denied visa to attend the event and Bhatt, 66, had said that he would not take his play "Daddy", which is based on his 1989 film of the same name, to Pakistan unless the other group gets a green signal.
The filmmaker is happy that the Pakistan Embassy has already issued visa for one group and sped up the process for another.
"All is well that ends well. It is a happy ending for us as the Pakistan Embassy has given a NOC to all the Indian plays which were to travel to Karachi for the theatre festival. I thank them from the bottom of my heart," Bhatt told PTI.
Bhatt said he had met the Deputy High Commissioner of Pakistan, who informed him that a miscommunication had resulted into this situation.
"I met the Deputy High Commissioner of Pakistan and he said that there was some kind of miscommunication. The papers had not landed at the place where it was supposed to, there was some sort of a slip-up. He assured me that there was no intention to jeopardise the cultural event," the director said.