Attempts to board the dhow for investigation by the French ship were abandoned when the pirates threatened to kill the 14 crew held hostage on the dhow.
'Following the joint efforts by the Indian and French warships patrolling the waters of Gulf of Aden, the pirates steered the dhow towards Somalian coast and released it along with the crew July 15 (Wednesday),' the Indian Navy official said.
However, the pirates robbed the crew of all their cash and valuables.
The hijacked boat was registered at Porbandar in India and was operating from the United Arab Emirates (UAE).
This is the sixth successful operation of the Indian Navy against the pirates in the region since November last.
Earlier this month, the Indian Navy thwarted a piracy bid off the Seychelles in the Indian Ocean region.