New Delhi's stern response came weeks after the leaders of the two sides took steps to rebuild ties using the goodwill generated by a cricket match between their teams which they watched together in Mohali.
U.S. President Barack Obama announced bin Laden's death at the hands of U.S. forces in the summer resort of Abbottabad, 60 km (35 miles) north of Islamabad.
"We take note with grave concern that part of the statement in which President Obama said that the fire fight in which Osama Bin Laden was killed took place in Abbotabad "deep inside Pakistan"," Home Minister P.Chidambaram said in a statement.
"This fact underlines our concern that terrorists belonging to different organisations find sanctuary in Pakistan."
The government has long tried to convince Washington to get tougher on Pakistan, especially after the 2008 Mumbai attacks, while pressing its own credentials as the region's only reliable democracy.
"India has been making this observation for a long time, that the Pakistani establishment is providing support to terrorist groups while keeping the denial process in play," said Uday Bhaskar, former director of the New Delhi-based Institute for Defence Studies and Analyses.
"They play both sides to the middle. This shows more of the same," he said. "Their support to terrorism as a strategic option vis-à-vis India and the U.S. needs to be smoked out."
Relations between the two nuclear-armed rivals were shattered by the three-day slaughter in Mumbai in 2008, which has sometimes been described as India's version of the Al Qaeda attack on the Twin Towers in New York.
India blamed the attacks on militants operating from Pakistan in collusion with the country's spy agency, the ISI. It has since slammed its South Asian neighbour for not doing enough to crack down on the perpetrators of the attacks which killed 166 people. Islamabad has denied involvement.
India's statement on Monday was a further illustration -- if any were needed -- of how far the two sides have to go to rebuild trust after Mumbai, despite the cricket diplomacy that raised hopes of a thaw.
"Pak unmasked" was the headline on the Indian news channel Headlines Today on Monday, while another channel speculated on whether bin Laden had died in an ISI safe house.
"Since the highest leadership of Al Qaeda is still intact, since the machinery has not been smashed, India will still be concerned about the whole issue of terrorism in Pakistan," said Srikanth Kondapalli, professor of East Asian studies at the Jawaharlal Nehru University in New Delhi.
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