Naik, who has been living in Malaysia for the last three years, is facing charges of inciting communal disharmony and committing unlawful activities in India.
Naik is wanted in India for serious charges related to terrorism after his name cropped in connection with a ghastly terror attack at Holey Artisan Bakery in Dhaka in July 2016.
Naik is alleged to have made controversial remarks against Malaysian Hindus and Malaysian Chinese during a talk in Kota Baru on August 3, prompting calls for him to be deported to India.
Hope India, Pakistan exercise 'utmost restraint' to prevent further escalation, says Malaysian PM Mahathir Mohamad
The Indian government revoked Article 370 which granted special status for Jammu and Kashmir and bifurcated the border state into two Union Territories on August 5.
Garbed in black and gold regalia, Sultan Abdullah voiced confidence that PM Mahathir Mohamad is able to tackle economic and social challenges in trying to rebuild the country.
The 71-year-old airline has been on the ropes since 2014 when Flight MH370 disappeared and MH17 was shot down by a Russian-made missile over war-torn Ukraine.
Mahathir, 93, is in the Philippines for the first time since his shock election victory last year.
The Ministry of External Affairs (MEA) had in January 2016 made a formal request to Malaysia to deport Naik.
Prime Minister Narendra Modi arrived here from Indonesia to meet his newly-elected Malaysian counterpart Mahathir Mohammad.
The pardon allows Anwar to re-enter active politics immediately, but it was not clear what his role in government would be.
Mahathir, 92, was yesterday sworn in as the seventh prime minister of Malaysia.