The ferry Scotia Prince was flagged of Monday from India's Tuticorin port on a 14 hour journey to Sri Lanka's capital Colombo.
The vessel which will travel twice weekly on Wednesdays and Fridays and has a capacity of 1,040 passengers.
The Times of India newspaper said the first journey will have 221 passengers with most of them being employees of the Indian state port agency.
The ferry allows baggage for up to 100 kilograms per person as well as another 100 kilograms at a lower cost compared to air travelers.
The one passenger was transporting a consignment of textiles to Colombo to sell with the use of carriers.
"We are carrying the goods and then will do some sightseeing and return," the newspaper quoted one of the carries as saying.
Sri Lanka and India has had strong economic links dating back over centuries but after independence from British rule trade barriers mounted, preventing the free exchange of goods between the two peoples.
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