The praise for Xi from an unlikely quarter came even as the 79-year-old Buddhist monk said the contentious border issue between India and China should be resolved through understanding and not by use of force.
The Dalai Lama's remarks came amid continuing standoff between Indian and Chinese troops in Ladakh in the wake of fresh border incidents in Chumar and Demchok sectors that cast a shadow on the Modi-Xi summit talks in Delhi.
"Sino-Indian relations (build) on the basis of mutual trust are very important. Not only the whole of Asia, but the entire world can benefit from their (good) relations. Harmony can be brought by trust and not fear.
"I have faith in the new leadership. He (Xi) is open-minded and his way of working is quite realistic," the Dalai said while addressing a gathering here to mark the 108th Foundation Day of Indian Merchants' Chamber and its ladies' wing.
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He said Xi should take lessons from "strong" Indian democratic practices and the "one-ness" in diversity.
The Dalai also said that Tibet's problem is also India's problem.
"Tibet's problem is also India's problem. Before 1950, there was not a single soldier on the northern border and it (the border) was peaceful. Sooner or later you have to solve the problem, not by force but by understanding. And understanding comes through talks," he said.