"Yoga was intentionally neglected by Britishers while they were ruling the country as they feared that through yoga India will become powerful in the world," Modi said inaugurating the Lakulish Yoga University.
"But even after Independence, we didn't come out of the slave mentality and continue to ignore the importance of yoga. And sometimes by equating yoga with communalism, we inflicted a great damage on us," Modi said.
Lakulish Yoga University, established by Life Mission Trust of Gujarat, is claimed to be the first ever such private sector self-financed institution in the country.
"Today, every human being in the world is confused, unhappy and is seeking inner peace. He does not need materialistic wealth but needs peace and only yoga taught by a professional, an exponent or a complete teacher can facilitate this peace," he said.
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"People across the globe are curious about yoga and it would have been better if successive governments of our country had included yoga as a path to reach the whole world. Then India would have got a great opportunity to connect with the entire world," Modi said.
Addressing the gathering, varsity founder Swami Rjarshi Muni said there would not be just one medium of teaching in the institution.
"No matter which language they (students) speak, here we will impart education in their preferred languages. We have yoga teachers from every part of the world," he said.
The university will award degrees for the three-year courses.
The state government had earlier enacted a law for creation of a Yoga university in the state.