New York [US], Sept 25 (ANI): Calling Pakistan "terroristan", External Affairs Minister S. Jaishankar has said that Islamabad has created an "entire industry of terrorism" to fuel unrest in Jammu and Kashmir and New Delhi can't talk to a country that sponsors terror.

"They have to accept the model which they have built for themselves, no longer works. You cannot in this day and age, conduct policy using terrorism as a legitimate instrument of statecraft that is at the heart of the issue. We have no problem in talking to Pakistan, we have a problem talking to terroristan," said Jaishankar during an interview to Asia Society Policy Institute's President Kevin Rudd on Tuesday.

Jaishankar also stated that Pakistan's reaction on the abrogation of Article 370 reflects its frustration and anger.

"For Pakistan, it was a country which has really created an entire industry of terrorism to deal with the Kashmir issue... Who now says that the investments of 70 years are undercut, if this policy succeeds. So their today's reaction of anger and frustration is in many ways because they built an industry over a long period of time," said Jaishnakar.

India on August 5 revoked Article 370 of the Indian Constitution, which gave special status to the state of Jammu and Kashmir. New Delhi's step did not go well with Islamabad which racked up its rhetoric against the former.

Pakistan's leadership, since then, has approached various countries and international organisations for seeking their support on the Kashmir issue. However, the international community has told Pakistan to directly engage in talks with India.

Jaishnakar further said that the revocation of Article 370 of the Constitution was necessary as it had become a 'barrier' and created a sense of alienation which led to separatism in the region.

"..Because you had a provision (Article 370) which stated essentially local ownership of property, there were no investments from outside. A lot of economic changes you see in the rest of India, the businesses you see, they're past Kashmir," said Jaishankar.

"What was actually meant to help Kashmir ended up in a way where the bridge became a barrier. It had political and eventually national security consequences. Lack of development, an opportunity created a sense of alienation - alienation to separatism, separatism used for terrorism," he added.

Earlier on Tuesday, India reiterated that the Kashmir issue is a bilateral matter between India and Pakistan and New Delhi's position on third-party mediation is very clear.

"On the issue of Jammu of Kashmir, our position on mediation is very clear. If there are issues to be discussed with Pakistan, it will be discussed bilaterally," Foreign Secretary Vijay Gokhale told reporters during a media briefing in New York. (ANI)