"I think the prism through which they see this issue has definitely been altered," Rao told Karan Thapar on 'Devil's Advocate' programme on CNN-IBN.
She was replying to a question on whether India saw a change in Pakistan's attitude towards terrorism during the recently concluded Foreign Secretary-level talks.
Asked whether it was a positive development, Rao said it was an outcome that India must take note of.
"I think when they speak of the fact that non-state elements in this relationship need to be tackled, that we must look at safe havens and sanctuaries, that we must look at fake currency, we must look at all the aspects that are concerned with the business of terror, I think that is a concrete development," she said.
Rao, however, said she would not expect Pakistani officials to talk about the strategic link between the Pakistani state and militancy and terror.
Asked whether her Pakistani counterpart Salman Bashir accepted the revelations made by Mumbai attacks case accused David Headley in a Chicago trial court, Rao said the strategic link between the Pakistani state and militancy and terror needed to be broken.
"Well, he is not going to say that in so many words to me. I think it would be unrealistic for me to expect that the Foreign Secretary of Pakistan is going to say that," she said when asked whether Bashir admitted to the strategic link between the Pakistani state and terror outfits.