Jaitley said successive government in India have engaged with the dispensations in the neighbouring country and the opposition party supports the policy.
"There is no substitute to engagement (with Pakistan)," Jaitley said in his address to the prestigious Heritage Foundation, a Washington-based think-tank.
Currently on a visit to Washington, Jaitley cited the Lahore-Bus service initiated by the then Prime Minister, Atal Bihari Vajpayee, and the unsuccessful Agra summit, to make the point that the BJP supported engagement with Pakistan.
Foreign Secretary Nirupama Rao is in Islamabad for talks with her Pakistani counterpart Salman Bashir.
Successive Indian governments have tried to engage Pakistan at various levels, he said.
However, he said the level of engagement, its content and results, would depend on the circumstances of the time.
Outcome of these engagements, Jaitley said, would depend on which way Pakistan moves from the circumstances in which it is in right now -- wherein it has a weak civilian government and the ISI and the Pakistani Army playing a dominant role in the decision making process.
Referring to the drawdown of US troops from Afghanistan, Jaitley said there is concern in India as to when the US pulls out, whether it would leave behind some kind of political stability and peace in the country that has been through an over three-decade long civil war.
Jaitley said over the last decade ties between India and the US have evolved as a "strategic partnership" and carry bipartisan support in both the countries.
He said there was convergence of assessment of the situation in Afghanistan, and now also in Pakistan, between the two countries. However, he noted that there will continue to be areas of differences between the two nations.
"We will not always have similar views on all aspect, but India US relationship itself has become a global reality," the Opposition Leader in Rajya Sabha said.
Responding to questions, Jaitley said the US and its companies should not have any apprehension over the Nuclear Liability Bill and should come and invest in India.
"It is a fairly safe regime to invest in," Jaitley said, observing that the bill was eventually passed by the Parliament through a much wider consensus.
Rajya Sabha member Chandan Mitra said there is genuine apprehension in India about nuclear power plants based on the experiences of the Bhopal Gas tragedy, cost of electricity obtained through nuclear energy, recent opposition to land acquisitions and the question of desirability of nuclear power plants in the wake of the disastrous tsunami in Japan this year.