India said Thursday it was outraged at Pakistan's release of an Islamist leader accused of organising the 2008 deadly Mumbai attacks that nearly brought the nuclear-armed nations to the brink of war.

A Pakistani court on Wednesday ordered the release of firebrand cleric Hafiz Saeed, who carries a $10 million US bounty, after Islamabad failed to back the charges of terrorism with evidence.

Saeed, who heads the banned charity group Jamaat-ud-Dawa (JuD), was put under house arrest in January following increased US pressure on Islamabad to rein-in militant groups.

"India, as indeed the entire international community, is outraged that a self-confessed and a UN proscribed terrorist is allowed to walk free and continue with his evil agenda," Raveesh Kumar, India's foreign ministry spokesman, told reporters at a weekly briefing in New Delhi.

"It also appears to be an attempt by the Pakistani system to mainstream proscribed terrorists," the spokesman added.

Kumar said the radical leader's release shows that Pakistan continues with its policy to support and shield non-state actors who are involved in militant activities in the region.

Saeed was declared a global terrorist by the US and the United Nations over his alleged role in the attacks that left nearly 166 people dead, including Western nationals.

JuD, which has operated freely across Pakistan and is popular for its charity work, is considered by the US and India to be a front for Lashkar-e-Taiba (LeT), the militant group blamed for the attacks.

US President Donald Trump in August angrily accused Islamabad of harbouring "agents of chaos" while Secretary of State Rex Tillerson has said too many extremists are finding sanctuary inside Pakistan.

New Delhi has long seethed at Pakistan's failure either to hand over or prosecute those accused of planning the attacks, while Islamabad has alleged that India failed to give it crucial evidence.

It is the third time that the cleric has been released by courts after Islamabad briefly detained him twice in the aftermath of the attacks in November 2008.

Saeed for decades has publicly espoused ending India's rule of the disputed Himalayan Kashmir region, with India accusing him of sending armed militants to the valley.

India and Pakistan, who rule parts of the disputed region, have fought two of their three wars over the territory, with scores of militant groups, including LeT, engaged in a decades-old armed insurgency against the Indian rule.