"Rao is personally a good friend of Congress party. We have no problems in discussing with him," party spokesperson P C Chacko told reporters.
He was asked about discussions with Rao who has been camping in the national capital for quite some time and has expressed readiness to merge his party with Congress if it grants Telanga statehood.
Replying to questions as to when a decision will be taken, he said the issue is really complicated.
Asked if a decision is possible before the next elections scheduled in 2014, he said Congress will be happy if the desire of the people was fulfilled early.
With protests intensifying over the demand for Telangana, Home Minister Sushilkumar Shinde had recently said that there was no forward movement on the issue.
"There is no forward movement," Shinde had said when asked about the Centre's steps for resolution of the sensitive issue.