S Jaishankar said that India has to deal with China with "different mindset and a stronger resolve".
Stating that the rise in China's power globally is a "fact of life", former foreign secretary S Jaishankar on Friday asserted that India has to deal with the country with a "different mindset and a stronger resolve".
He added that India could not afford the complacency like in the case of the Hambantota Port which Sri Lanka leased out to China.
India had registered a protest with the island nation when a Chinese submarine had docked at the port in Colombo in 2014.
Mr Jaishankar also said it was Pakistan which came out with the narrative that Kashmir dispute was the "central issue" between the two countries.
The former Foreign Secretary opined that the settlement of the Kashmir dispute may not solve all the problems between New Delhi and Islamabad.
He said that Pakistan should move away from supporting terror activities as that was the "central issue" rather than the Kashmir dispute.
Mr Jaishankar was delivering the 24th Lalit Doshi Memorial Lecture here on 'Doing Foreign Policy Differently'.
Mr Jaishankar also pitched for working on a foreign policy based on changing situations across the world.
"China's influence in the world cannot be disregarded. We should be open to find a common ground which is in our national interest. But all of this requires a different mindset and stronger resolve," he said.
"We cannot afford the complacency of the past that oversaw the Hambantota project, of ballooning trade deficits nor can we take comfort in the rhetoric of combativeness. Chinese power is a fact of life," Mr Jaishankar added.
Talking about addressing the issue of trade deficit between India and China, he said that on the economic front India needs to accept that China will be a major investor.
The former foreign secretary, however, said that India will have handle this part deftly in view of national security.
"The trade deficit is unsustainable and the case to press for greater market access has only become stronger. Strategically, India can learn from China itself by leveraging the global environment to maintain and create a better balance," he added.
While replying to a query from the audience about India's relation with Pakistan, Jaishankar refused to believe the Kashmir dispute was "central" to it.
"If Kashmir is a central issue, then why do acts of terrorism take place outside Kashmir? Why was this city (Mumbai) attacked (in 2008)? I am not convinced that Kashmir alone is the issue and settlement of Kashmir will solve all problems with Pakistan," he added.
Mr Jaishankar said that the terror activities are supported openly in cities of Pakistan and asked the country to desist from such misadventures.