Experts believe that the heightened friction between the two neighboring countries was declining, as New Delhi had shown some moves to deescalate the tension.
"This will be a very major setback. It comes at a time when the government of India, which was strengthened after the elections, had been making some positive moves," a veteran Pakistan journalist Ahmed Rashid said.
The Pakistan government might have stated that it will appeal against the Lahore High Court's verdict to set Saeed free, but the decision has certainly dented hopes of lowering tension between the two neighboring countries, and has further struck a blow to the already estranged relationship, the Christian Science Monitor reports.
"It will further complicate the already complex and fragile India-Pakistan peace process. India had wanted to see the JuD leaders extradited or brought to a full trial in Pakistan. This sends the wrong signal," said Rifaat Hussain, an analyst at the Quaid-i-Azam University in Islamabad.
A full bench of the Lahore High Court, on Tuesday, had ordered Saeed's release from the house arrest on the basis of a habeas corpus petition filed by his lawyer.
The high court said that it had not received substantial evidence to continue the detention of Saeed, the prime accused of the November 2008 Mumbai attacks.
The court also ordered the release of another JuDleader Colonel (retired) Nazir Ahmad. (ANI)