The "wanted" notice announcing the large bounty for Saeed, 62, was posted on the website of the U.S. State Department's Rewards for Justice program late Monday.
The amount is one of the highest offered by the program, on par with the sum pinned on the Taliban leader Mullah Omar, but below the $25 million on offer for al Qaeda leader Ayman al-Zawahiri.
The notice describes Saeed as a former professor of Arabic and engineering who helped found Jamaat-ud-Dawa, a radical Islamist organization that aims to bring about Islamist rule over areas of India and Pakistan. The United States and the United Nations have declared it a terrorist organization.
Jamaat-ud-Dawa's military wing Lashkar-e-Tayyiba (LeT) -- labeled a "foreign terrorist organization" by the United States in December 2001 -- is suspected of carrying out several high-profile attacks in India.
In November 2008, terrorists stormed locations throughout Mumbai, killing scores of people and taking hostages. Six American citizens were killed in the carnage.
In a rare interview in 2010, Saeed told The Independent newspaper that Lashkar-e-Tayyiba was not involved in the attacks, despite substantial evidence to the contrary.
The Indian government has issued a notice with Interpol against Saeed in relation to his alleged role in the Mumbai attacks.
On Tuesday, India welcomes the reward notice.
"It reflects the commitment of India and the United States to bring the perpetrators of the Mumbai terrorist attack to justice and continuing efforts to combat terrorism," the Ministry of External Affairs said in a statement. "It also sends a strong signal to LeT and also its members and patrons that the international community remains united in combating terrorism."
Muhammad Yahya Mujahid, the spokesman for Jamaat-ud-Dawa, said the bounty was yet another "attack" on Islam and Muslims.
"The only thing these American actions will do is create a more passionate hate for American in the hearts of Muslims," he said.
Saeed, the spokesman said, has not been "hiding in mountains and caves" but living openly in Pakistan.
He is scheduled to address a rally Tuesday in Abbotabad, Mujahid said.
