NEW YORK: India is willing to talk about the disputed territory of Kashmir with Pakistan as part of an effort to advance peace talks, India’s top diplomat told the Wall Street Journal on Wednesday in an interview.

A carrot to put Kashmir issue back on agenda was stipulated on Pakistan’s assurance to take serious action against militants who use its soil to attack India.

The WSJ said the comments by Indian Foreign Secretary Ranjan Mathai suggested that a recent thaw in relations between the two countries could lead to discussions on the key territorial issue which had been off the table since 2007.

“I wouldn’t have been as optimistic six months ago,” Mr Mathai said about prospects for the latest round of peace talks, which began in earnest a year ago. “The fact the government is able to move on the trade track shows there’s a greater willingness to take things forward by all the players.”

Abdul Basit, spokesman for Pakistan’s foreign ministry, told the newspaper that while there had been progress in the “tone and tenor” of the discussions, Pakistan believed that “unless the Jammu and Kashmir issue is resolved we cannot expect lasting peace in South Asia”.

As the talks developed, India would consider reopening a serious discussion on Kashmir, Mr Mathai said. New Delhi, he added, “would be happy” to start talks towards a deal to keep Kashmir’s borders as they were but allow greater trade and movement of people across the Line of Control, the de facto frontier that divides the territory.

Mr Mathai told WSJ Pakistan’s failure to clamp down on militant groups that had attacked India was the major roadblock to peace talks.

He said it was deeply troubling to India that militant leader Hafiz Saeed was able to address public gatherings and appear on television in Pakistan.

The US and India allege Mr Saeed helped plan the 2008 attacks on Mumbai which killed more than 160 people. Last week, Washington offered a $10 million reward for information leading to his arrest and conviction.

At the same time, Mr Mathai said New Delhi viewed recent moves by Pakistan, including an agreement in February to open its markets to Indian goods, as a signal Islamabad was serious about an improvement in ties.

President Asif Ali Zardari visited India on Sunday and Indian Prime Minister Manmohan Singh accepted his invitation to make a first official trip to Pakistan, although he didn’t commit to a time-frame.