Expressing the hope that the bilateral talks will resume, he said at the end of the day the two countries will have to talk to each other.
"Both our countries do recognise that Jammu and Kashmir is a problem which needs to be resolved. As part of dialogue process in the past we have been trying to resolve it.
"One would hope the problem is resolved to our mutual satisfaction and resolved in just and fair manner," he said during an interaction with the media at the Hyderabad Press Club.
"There are other issues our countries have been talking about. There are 10 segments within the framework of composite dialogue and Jammu and Kashmir is one of them.
"We would not like our relationship to be held hostage to one single issue but we would like to talk. Sincere efforts should be made to resolve the issue and both countries need to do it," he said.
"About 20 years ago, Pakistan used to have pre-conditions for talks. First resolve Jammu and Kashmir dispute then we will talk... but that did not work. We have to talk to each other with an open mind," the high commissioner said when asked about the Modi government's stand that Pakistan should decide whether it wants to hold talks with India or Kashmiri separatists.
India called off talks between foreign secretaries in August after the Pakistani high commissioner held meetings with Kashmiri separatist leaders.
Concurring with Indian External Affairs Minister Sushma Swaraj's statement that there are no full stops in diplomacy, he hoped that process of dialogue will resume.
"Jammu and Kashmir is a part of composite dialogue. Whenever the dialogue process is resumed, we will be able to build on the past achievements and move forward.
"It is in our mutual interest. It is not that my country is doing favour to India or India doing favour to Pakistan. Peace is in mutual interest. It is also in regional interest," he said.
When asked about ceasefire violations by Pakistan, Basit said: "Obviously our position is different." He stressed the need for both the countries to adhere to all agreements and declarations made in the past.
He also underlined the need for focusing on positivity.
"There is too much negativity in our bilateral narrative. Unless we think positive, things will not move forward," he added.