Speaking at the Council on Foreign Relations, a prominent think tank, the finance minister blamed Pakistan for the strained Indo-Pak ties.
Jaitley, who is also holding the portfolio of defence minister, said India made many efforts to improve the ties with Pakistan over the last few years but every time there was a negative reaction.
"Now we have this unprovoked gesture of a military court sentencing an Indian to death through a kangaroo court process," said Jaitley, adding that such acts will help the cause of peace in the region at all.
Pakistan claims its security forces had arrested Jadhav from the restive Balochistan province on March 3 last year after he reportedly entered from Iran. It also claimed that he was "a serving officer in the Indian Navy."
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The Pakistan Army had also released a "confessional video" of Jadhav after his arrest.
India had acknowledged that Jadhav had served with the navy but denied that he has any connection with the government.