Bhutto, in her inaugural speech, said that both India and Pakistan have a common heritage and nothing can separate that rich legacy.
The world shook when Pakistan and India were divided, said Bhutto, adding that this happened again when Bangladesh broke away from Pakistan in 1971.
India and Pakistan shared a rich cultural background and the unified strength of the two countries could beat the world, she said.
Noted writer Paul Zachariah and Binoo K John, director of the Kovalam Literary festival, were present among the audience.
Bhutto's address was followed by a detailed discussion on Binoo K John's book Last Song of Savio De Souza with journalist and writer Suresh Menon and the author.
Aswhin Sangi spoke about his work Chanakya's Chant and shared his experiences with the audience.
Sri Lankan writer Shehan Karunathilake spoke about his book Chinaman that is based on cricket.
Authors Mohammed Haneef, Meena Kandaswamy and Paresh Mehrotra are expected to participate in the festival on Sunday, the last day of the festival.
Image: Fatima Bhutto at the Kovalam Literary Festival