Shankar, who served as the Foreign Secretray from 2006 to 2009, said the Pakistani Army is also "reluctant" to have robust relations with India and the two countries have "profound misunderstandings" about each other.
To a question on the claim of former Pakistani foreign minister Khurshid Mahmud Kasuri that both sides had come to an agreement on the Kashmir issue in 2007 through back channel talks, Shankar said there were still some aspects left to concur on.
Chaudhry's sacking had led to massive protests by the legal fraternity and the civil society in Pakistan.
In his book 'Neither a Hawk nor a Dove', Kasuri has claimed that in 2007 the "solution to Kashmir was in the grasp of both governments".
Menon acknowledged that "there was tremendous progress made" through these back channel talks.
"Pakistani domestic politics could not support that (the hope of a resolution to the Kashmir problem). You have the same problem repeatedly on both sides where the domestic politics does not support it," Menon said.
"Domestic politics does not support big initiatives or big steps which changes the narrative of fundamentals," the former top diplomat said.
Menon was a part of the panel discussion organised after the launch of a book 'The People Next Door: The Curious History of India's Relations with Pakistan', authored by TCA Raghavan, former Indian envoy to Islamabad.
He added that the Pakistani Army considers itself as the guardian of the state and is cautious about its ties with India.
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