The Central Bureau of Investigation (CBI) said it had failed to update its records after one accused was arrested in 2010, meaning his name remained on a list handed over to Islamabad this March.
It is a setback for the government that has long accused Islamabad of aiding militant groups for attacks on India, including the 2008 Mumbai raids. The list was originally seen as adding pressure on Pakistan to act.
A second person on the list sent to Pakistan was earlier traced by local media to his home in western Maharashtra state. Another person on the website was extradited from Bangladesh to India in October, media reported.
Officials including Home Minister Palaniappan Chidambaram, who initially laughed off reports of errors in the list, admitted responsibility.
"Error has been accepted. Responsibility will be fixed for the mistake," Internal Security Secretary U.K. Bansal told reporters.
The list included names of five Pakistani army men, the first time India has formally accused the powerful military of aiding militant attacks on India.
The embarrassment is a personal blow to Chidambaram, seen as one of the more efficient ministers in Prime Minister Manmohan Singh's team, and it sparked calls for his resignation from the Hindu nationalist main opposition Bharatiya Janata Party.
It is also a setback for a Congress-led coalition government that has been perceived to be out of touch with the people due to its lumbering response to a series of high-profile graft cases and soaring prices.
The Congress party too has painted itself into a corner this week. Rahul Gandhi, seen as a prime minister in waiting, claimed the opposition-ruled Uttar Pradesh killed and incinerated farmers protesting against a $2 billion highway plan through their lands.
The claims came under immediate criticism from both the state government and media, which cast doubt on his charges. Many commentators said the controversy was a setback for Gandhi's campaign to portray himself as a future leader of India.
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