The Spokesperson said that the Pakistani government should make sure that he is arrested and charged for his crimes.
Chief of the banned outfit Jamaat-ud-Dawah (JuD), Hafiz Saeed, had been under house arrest since January. The US escalated its criticism of Pakistan's decision to set free the alleged mastermind of the deadly 2008 attacks in Mumbai, with the White House warning that the move may damage bilateral relations.
Pakistan has released a militant wanted by USA authorities from house arrest, after a court ordered an end to his detention. The release of Saeed is a step in the wrong direction. The United States has offered a $10 million reward for information leading to his arrest and conviction.
"Saeed's release, after Pakistan's failure to prosecute or charge him, sends a deeply troubling message about Pakistan's commitment to combatting global terrorism and belies Pakistani claims that it will not provide sanctuary for terrorists on its soil", said press secretary Sara Huckabee Sanders.
"I'm happy that no allegation against me was proved, which could have done damage to me, or my country's interests", Saeed later told supporters. India believes that Lashkar-e-Tayyaba was behind the deadly attack in Mumbai.
India's External Affairs Ministry condemned the release, and said in a statement that a "self-confessed and United Nations proscribed terrorist was being allowed to walk free and continue with his evil agenda".
After the attack on the Indian commercial capital, Pakistan was put under intense pressure to detain and prosecute Mr Saeed.
While some in Pakistan may wish to see Mr Saeed placed on trial, there is widespread suspicion among Indian and U.S. officials that he still retains close links to the country's Inter-Services Intelligence (ISI), which has been long blamed for sponsoring numerous cross-border attacks on Indian targets. He has been designated a terrorist by the U.S. Justice Department.
Saeed, right after his release had said that he will continue to work for the cause of Kashmir. Previous administrations handled Pakistan with kid gloves despite compelling evidence of its use of terrorism and terrorist groups to further its policy objective, fearful that Washington did not have sufficient leverage to handle a state that threatens to go rogue when confronted. He also expressed a desire to see India - Pakistan's archrival - become an active stakeholder in stabilizing Afghanistan. "They play everyone, whether it's China or the terrorists or us".
The campaign appeared to produce some success this year when Pakistani security forces assisted with the release of a Taliban-held US-Canadian family after five years in captivity.