"Whenever Pakistan and India move towards peace, there is a militant attack and India suspends peace talks. I think it encourages the terrorists," Chaudhry told BBC Urdu in Washington.
Replying to a question about the arrest of Jamaat-ud-Dawa (JuD) chief and Mumbai attack mastermind Hafiz Saeed, he said, "We don't want to send any negative message from Pakistan to the international community."
Chaudhry said Pakistan wants peaceful relations with India and reiterated the Pakistan government's stance that the relationship should be based on mutual respect.
He also rejected the notion that dreaded Haqqani network is linked with Pakistan.
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"They (Haqqanis) are neither our friends nor our proxies. Those playing with human lives, we are against such elements or activities. We do not want that they should commit terrorism against anyone, America or Afghanistan. It is wrong to kill innocent people," he said.
Afghanistan has long blamed Pakistan for not taking action against Haqqani network sanctuaries on its soil, alleging that this has allowed insurgency there to sustain.
"Declaring Pakistan a state sponsor of terrorism is far from reality. It is wishful thinking by a few individuals who try to exaggerate such stories," he said.
Earlier this month, a bill was moved in the US House of Representative that seeks to declare Pakistan a "state sponsor of terrorism".
He said the new US president Donald Trump has positive views about Pakistan.
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