India still considers the Taliban to be a terrorist group with close links to Al-Qaeda and other outfits.
But New Delhi would back proposals to reach out to them conditionally, Foreign Minister S.M. Krishna told the Times of India newspaper in an interview published Saturday.
"The international community has come out with a proposition to bring into the political mainstream those willing to function within the Afghan system," he said.
"If the Taliban meet the three conditions put forward -- acceptance of the Afghan constitution, severing connections with Al-Qaeda and other terrorist groups, and renunciation of violence -- and they are accepted in the mainstream of Afghan politics and society, we could do business," added Krishna.
The Economic Times quoted Krishna as saying the Taliban "should be given a second chance" and that military action was not the only way to counter their activity.
Krishna's comments follow a major international conference in London this week where nearly 70 countries backed a 500-million-dollar Afghan government drive to tempt fighters to give up their weapons in exchange for jobs and other incentives.
India has provided over one billion dollars in humanitarian and development assistance to Afghanistan since the Taliban were ousted in 2001 and also warily backed US President Barack Obama's surge of 30,000 extra US soldiers.
But it has expressed concerns that an early US exit from the war-torn country could reverberate in the region, already reeling from a wave of militant violence in Pakistan.
"We're next door and our experiences make it difficult for us to differentiate between good or bad Taliban," Krishna told the Times of India.
He said Afghanistan's stability depended on neighbouring countries' "support, sustenance and sanctuaries for terrorist organisations" ending immediately, an apparent reference to long-time foe Pakistan.