Krishna, who is visiting New York for the first time after taking over as the external affairs minister, was speaking to journalists at a reception organised by Hardayal S Puri, India's Permanent Representative to the United Nations.
Earlier, the Indian Mission in New York also issued a denial on the subject. "There is no change in India's policy towards Afghanistan. The minister has been misquoted in his interview with the Wall Street Journal and he did not say that there should be a political settlement with the Taliban," it said.
The Opposition in India had slammed the government over the report and demanded that Prime Minister Manmohan Singh clarify his stance on the Taliban.
"The writer himself agreed that he misquoted the minister. The tapes are clear proof for that," Puri told Rediff-India Abroad.
"Our policy is one of strengthening the government of Afghanistan in achieving its social and developmental objectives. It is for the government to take the initiatives necessary so that all those who abjure violence and extremism and accept Afghanistan's constitution and democratic set-up, join the political process. It is not our position that a political settlement be attempted with those who do not share these aims," the statement said.
Krishna was very careful with his words when he spoke to journalists at the reception.
Speaking about the reported incursions by China along the Line of Actual Control, Krishna said India's relations with China remained cordial and peaceful and the reports had been exaggerated.
On India's relations with Pakistan, the EAM reiterated that Islamabad has to act against the perpetrators of the terror attack on Mumbai. He evaded a query on India's likely response if Pakistan failed to take any action against the 26/11 terrorists, saying he didn't want to reply to hypothetical questions.
Speaking on the contentious issue of India signing the Nuclear Non-Proliferation Treaty, Krishna said India will not sign the treaty unilaterally. Puri had earlier sent a letter to Susan R Rice, the United State's ambassador to the UN, clarifying India's position.
He also reiterated India's call for permanent inclusion in the Security Council of the UN. "The UN needs to be reorganised according to current realities," Krishna noted.
He chose not to comment on Libyan leader Muammar Ghaddafi's call for an independent nation in Kashmir and his opposition to granting a membership to India in the UNSC.
Video: Paresh Gandhi