The neighbours have since independence been at loggerheads over Kashmir issue.
India regularly accuses Pakistan's army of violating ceasefire and now Khurshid admitted the relationship was fraught.
Khurshid said Delhi would take him at his word on wanting peace with India
"We talk to Pakistan periodically and in terms of personal gestures we receive great warmth," he said. "But the on-the-ground reality and the results of our meetings are very disappointing," he added.
After several meetings and talks, Pakistani Prime Minister Nawaz Sharif had earlier last month vowed to go the "extra mile" to make peace with India. And on this, Khurshid said Delhi would take him at his word.
"Pakistan has a lot of very, very difficult issues to deal with at home," he was quoted as saying. "Our view is that we should give them time, not at our cost, of course, but that we should give them the benefit of the doubt," he said.
"When Mr Nawaz Sharif says he wants peace and good relations with India, we take him at his word."
Media reported that with recent shootings at the border among the heaviest since a ceasefire agreement in 2003, Khurshid pointed out that Pakistan has not yet followed through on its promise of top-level military meetings to sort out better arrangements in Kashmir.
"If they can address the dismantling of the infrastructure of terrorism, that would be a good start," he told an Australian newspaper.