"Actually the Tibetan problem (is) also (a) problem of India. Before 1950, you see the whole northern border, really peaceful, no single soldier. So India's problem," the 79-year-old spiritual leader said in Mumbai.
"So sooner or later you have to solve these problems, not by force but by understanding and talk. Understanding comes through talk, only through personal contact," he added.
The comments came as PM Modi and President Xi leaders met in New Delhi as part of the latter's three-day visit to India, where the Dalai Lama has lived since 1959.
The presence in India of the Dalai Lama, who fled Tibet following a failed uprising against Chinese rule there, is a source of tension between the two Asian giants.
The Dalai Lama also hailed President Xi as "more realistic" and "more open-minded" than that of his predecessor Hu Jintao. "So he can learn more things from India," he said, adding, "After all, Sino-India relations on the basis on new trust is very important, very essential."
The Nobel Peace Prize winner supports "meaningful autonomy" for Tibet within China rather than outright independence. But China accuses the Dalai Lama of covertly campaigning for Tibet's independence and calls him a "splittist".
About 20 students shouted "We want justice" for Tibet and waved Tibetan flags before police dragged them kicking and screaming into waiting buses.
"Tibetans are law abiding citizens. Rest is up to the Government of India," the Dalai Lama said about the arrests.
He was speaking at the 108th Foundation Day of the Indian Merchant's Chamber.
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