The famous White Horse Monastery in Luoyang in Henan Province of central China was built in the 1st century A.D. by Emperor Han Mingdi to house the first two Indian Buddhist monks from India in China. The two monks, Kashyapa Matanga and Dharmaratna, were said to have brought a number of Buddhist sutras on a white horse (hence the name White Horse Monastery), lived at the monastery and translated the sutras into Chinese. After they passed away, both of them were buried within the monastery complex, a rare honor for Buddhist monks in China. Today, the White Horse Monastery is an important place of pilgrimage for Buddhist devotees of China, besides being a major tourist attraction.

During Prime Minister Vajpayee’s visit to China in June 2003, it was announced that India will construct an Indian style Buddhist Temple in the White Horse Monastery Complex. Subsequently, during Premier Wen Jiabao’s visit to India in April 2005, a bilateral MOU on constructing the temple was signed. It was decided that the Indian side would provide the funding, besides provision of architectural design, deputation of experts and provision of an Indian-style Buddha statue, and raw and finished stone material. The Chinese side provided the plot of land.

The GOI established an Advisory Committee under Chairperson Dr. Kapila Vatsyayan, which recommended the architectural design submitted by M/s Akshaya Jain and Raka Chakravarty. Main features of the design are that it is a contemporary structure which draws inspiration from traditional Buddhist architecture of India. It has a circular structure patterned on the Sanchi Stupa, which is placed within a colonnaded enclosure. The circular structure is situated in a water pond giving the appearance of rising from a lotus pond. The Advisory Committee also recommended that the Buddha statue be a replica of Sarnath Buddha statue in Chunar sandstone. The carved panels along the circular Pradakshina path have themes drawn from the life of the Buddha such as Mayadevi's dream, the four significant incidents in Prince Siddhartha's life, departure from Kapilavastu, enlightenment under the Bodhi tree, the first sermon in the deer park in Sarnath, return to Kapilavastu, Yashodhara handing over son Rahul to the Buddha and Mahaparinirvana at Kushinagar.

The Indian-style Buddhist Temple is one of India’s biggest public diplomacy initiatives.