The Dalai also urged China to give Tibet meaningful "self-rule" and "autonomy".
The remarks by the 81-year-old Nobel Laureate came on a day when China alleged that India in disregard to its concerns "obstinately" arranged his visit to the "disputed part" of the eastern part of China-India border, causing "serious damage" to its interests and bilateral relations.
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His remarks also came against the backdrop of criticism by the Chinese state media that India is using the Dalai Lama as a diplomatic leverage to challenge China's "bottom line".
Unfazed by Beijing's objections to his visit to Arunachal Pradesh, the Dalai said, "Many Chinese love India but there are some narrow minded politicians as I have mentioned, they consider me as a demon."
Articulating the Tibetan stand, the Dalai said, "We are not seeking independence. We are willing to remain within the People's Republic of China."
"I always admire the spirit of the European Union. Individual nations' sovereignty is important but that's not so important. What is important is the common interests.
"So for material development to remain with the People's Republic of China is in our interest. So, the Chinese government also should feel ok. At the same time the Chinese government should give us meaningful self-role/autonomy," he said.
The Dalai thanked Indian government for letting him visit the frontier state.
He spoke fondly of Arunachal Pradesh and said he had a special connection with the state as it served as his point of entry when he arrived in India in 1959.
"I would like to thank the government of India. I have been in this country since 1959. India has taken great care of me. I am their longest staying guest. I am thankful to them.
"When I got freedom, when I first reached India, I entered through Arunanchal Pradesh. I have an emotional connect with the state. It is a special place for me."
He gave a discourse at Buddha Park here this morning.
The spriritual leader had arrived here last evening from Guwahati accompanied by state Chief Minister Pema Khandu.
Tomorrow, he would impart teachings at Dirang and confer the 'Avalokiteshvara Permission' at Thupsung Dhargyeling Monastery in the morning.
From April 8 to 10, the Dalai will deliver discourses in Tawang. Owing to the rescheduled visit, he would not be able to go to Itanagar.
"I am a Buddhist. The entire Himalayan range had been traditionally following Buddhist dharma and modern physics is based on Buddhist philosophy.
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