stressed that any disturbance at the border will have an adverse impact on the public perception which is vital for improvement of bilateral ties.
In his speech titled, "Old Ties-New Model?", he said, "today, constraints on conflict and confrontation are indisputable. It has put the focus on maintaining peace and tranquillity on the disputed border between India and China".
The closed door seminar was organised by the New Delhi-based Observer Research Foundation (ORF) and China Foreign Affairs University Conference, in which strategic analysts from both sides took part.
It was held on August 19 but his speech copies were circulated to the media in Beijing on Wednesday.
Jaishankar reminded the audience of the comments made by Prime Minister Manmohan Singh and defence minister AK Antony that emphasised on the importance of peace at the borders.
Jaishankar, who negotiated hard with the Chinese for the withdrawal of the People's Liberation Army (PLA) troops from Daulat Beig Oldi near Ladakh in April this year, said "this bears reiteration as there is concern that if stability or peace and tranquillity are disturbed, it can vitiate the overall atmosphere of our ties".
"We should never underestimate the importance of public perceptions in the shaping of international relations. A corollary is that both nations need to devote even more attention and energy to strengthening those aspects", he said.
Jaishankar also said that it was important for China to address India's concerns regarding Beijing's plans to construct new dams on the Brahmaputra and other rivers that flow into India from the country.
"New thinking requires that we go beyond narrow legalistic approaches. It is natural that as neighbours, India and China will be confronted with situations that call for a larger political vision", the Indian envoy said.
"A good example is the question of trans-border rivers, for some of which China provides hydrological data during flood season. There are worries in India about the possible impact of Chinese development projects on downstream areas. Both common development and mutual respect should warrant a more reassuring Chinese position", he said.
China should also address India's concerns about market access to its products, the Indian envoy, who is now tipped to take over as ambassador to the US, said.
"India and China are busy constructing an economic partnership that works for both of them. Given that their economies are so different, it is inevitably a complicated and sometimes controversial exercise", he said.
"Addressing Indian concerns about market access in China can really help in creating a more durable basis for what is clearly in mutual advantage. On India's part, the benefits of Chinese investment which could expand the manufacturing sector require objective consideration", Jaishankar said.
"There are three levels at which India and China can practice this new thinking. We could see more pragmatic cooperation based on complementary capabilities and mutual needs", Jaishankar said.
The Indian envoy asserted that the two countries could see structural cooperation on a larger stage that reflects their shared interests as developing economies and sovereignty-conscious states.
"Nor can one rule out more strategic cooperation that takes into account historical trends including the re-emergence of Asia. Each one of these levels, however, has its own contradictions and their effective handling will be crucial", he said.
Referring to the new strategic perspectives from China, seeking to build a "new model" of great power relations, the envoy said that it meant non-conflict and non-confrontation including proper handling of differences, mutual respect for core interests, addressing major concerns and common development that seeks win-win solutions.
"Underlying this 'new model' approach is the impressive growth of Chinese power in the last few decades", he said.
"More able to deal on its own terms, this thinking is intended to advance or 'integrate' the changed interests of a 'new' China with that of the world", he said.
"Applying this approach to India-China relations offers some interesting insights. Both at an abstract and practical level, the three propositions that constitute this 'new model' appear unexceptionable", Jaishankar said.
"Thus, on interdependence, there is a broad acceptance that international relations today does operate under considerable constraints. As a result, stability, predictability and risk management become increasingly important in inter-state ties, including between India and China", he said.