Addressing a 5,000-strong Indian community at the Shanghai Expo Centre here, Modi said ancient Chinese Buddhist scholar Hieun Tsang had written that in western India, especially Gujarat, there was a lot of influence of Lord Buddha's teachings, including in Vadnagar, Modi's hometown.
Modi said that while he was chief minister of Gujarat, he asked his government to start excavation to find out Buddhist relics, and a lot of relics associated with Hieun Tsang were discovered in his hometown.
"When I won (the general elections), then Xi told me about the find in my village... He came to India and to Ahmedabad, but unfortunately he could not come to Vadnagar," said the prime minister.
"President Xi told me that 'After Hieun Tsang returned from your gaon (village), he came and settled in my gaon'.
"President Xi took me to the temple and showed me the description of my city (Vadnagar) written in Chinese script by Hieun Tsang," said Modi, to loud applause.
"Such friendship between two leaders can only be described as 'plus one'," said Modi.
The prime minister had visited Xi'an, the capital of Shaanxi province and the hometown of Xi, in the first leg of his China visit on Thursday.
After talks, Xi had accompanied Modi to the Wild Goose Pagoda and shown him around, including a book of Buddhist writings.
Xi had invited Modi to Xi'an in a reciprocal gesture after Modi welcomed him to Ahmedabad during his visit to India last year and treated him to a colourful walk beside the Sabarmati river front.