India, he said, was "ready to speak to Pakistan" and is "willing to normalise the relationship" but "then there are a few red lines".
"We create the environment, we fix up a dialogue at the level of Foreign Secretaries, our Foreign Secretary is to visit Pakistan (and) literally a few hours before that they invite the separatists for a dialogue to their High Commission (in New Delhi).
"So I think a new red line has to be drawn in Pakistan to reconsider this question that who they want to speak to? Do they want to speak to the Government of India or they want to speak to those who want to break India," he said at the India Economic Summit here.
"So unless Pakistan makes the conscious choice, a dialogue with Pakistan will not be possible," he said.
India in August called off a scheduled foreign secretary-level talks after Pakistan's envoy met Kashmir separatists on the eve of the dialogue.
Referring to ceasefire violations by Pakistan on the Line of Control, he said the consequences of its "misadventure" like firing on civilian population and uprooting of village, "would be an unaffordable cost for Pakistan."
Jaitley, who is also the Finance Minister, said New Delhi has given three messages to Pakistan.
"The first is that we want to talk. So we invited them. The second is we send a foreign secretary there. But they must decide whether they are ready to speak to our foreign secretary or to speak to those who want to break India. The third is that this kind of a situation in international border cannot go on.
"That's not an environment for a dialogue... India would like to normalise the relationship. But whether Pakistan wants to normalise the relationship depends on Pakistan," he said.
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