He also dismissed Pakistan's contention that "non-state actors" were behind the terror acts in India, saying they are not coming from heaven, but from territory under the control of the neighbouring country.
Mukherjee, who is on a four-day state visit to Belgium, reiterated that the terror infrastructure in Pakistan needs to be brought down.
"Terrorist activities must be curbed. And state-sponsored terrorism can never be accepted. Therefore, repeatedly we are saying, please dismantle the terrorist outfits which are located in your area," he said in an interview to Euronews.
Mukherjee said non-state actors who perpetrate terrorism was a word used by Pakistan.
"It may not be. But non-state actors, that is the phrase they used, then I responded by saying that non-state actors are not coming from heaven. Non-state actors are coming from territory under your control.
"And not now, in 2004 Pakistan agreed that their territories will not be allowed to be used by forces inimical to India," he said when he was asked to comment that India says that this is state-sponsored terrorism and Pakistan says it is not state-sponsored terrorism.
He said India does not have any territorial ambitions and wants peace with its neighbours while maintaining its own territorial integrity.
"In 1971, when Indira Gandhi was Prime Minister and Zulfikar Ali Bhutto was Prime Minister of Pakistan, India entered into an agreement which is known as Shimla Agreement...ninety-one thousand imprisoned soldiers, prisoners of war, were returned," he said.
"This was just to show the goodwill that in our basic foreign policy we do not have any territorial ambition, we do not have any ambition to export our ideology to any country or we do not have any commercial interests," Mukherjee said.
The President stressed that no country can, however, compromise on its territorial integrity.
"We want to have good relations with our neighbours. When I was Foreign Minister, more than often I used to say that I can change my friends if I like but I cannot change my neighbours if I like. I shall have to accept the neighbour the way he is.
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