Specifically, ISRO was requested to collaborate with JPL in the MoonRise mission. The mission is currently in its phase A study under the New Frontiers Programme. It already has collaborations from Canada, Germany and Japan and hence I think hardly just a Indo-US Moon mission.
More about MoonRise here -
http://moonrise.jpl.nasa.gov/
It sounds like ISRO is volunteering to "sell" a lunar orbiter to NASA as part of the JPL bid for New Frontiers. If ISRO were going to pay for the orbiter itself, then this would not be a New Frontiers bid, this would be an international mission with a flight opportunity for a US experiment.
In response to a Parliamentary question, it was revealed -
http://isro.gov.in/parliament/2011/Budget/LUSQ2131.pdf - that subject to the approval of the MoonRise mission, ISRO is considering providing an orbiter spacecraft. ISRO's proposed orbiter would cost Rs. 150 crore ($33.25 million) which includes operations.
Pradeep
And just to be clear, MoonRise is one of three New Frontiers missions currently being studied, with the others being OSIRIS-REX (to do sample return from a NEO) and SAGE (to land on Venus). SAGE is seen as the least likely, as this is the first time such a mission has been proposed, with MoonRise and OSIRIS about equal chance. Having a strong international component (something that IIRC, OSIRS lacks) may help to push MoonRise ahead...