The celebration began with special prayers at a temple close to the Dalai Lama's palace in Dharamsala, the Indo-Asian News Service reported.
"Exiles, monks and well-wishers are joining the birthday celebration," said an official of the religious leader's office.
Thousands of Tibetan exiles were celebrating with events in Dharamsala as well as Bylakuppe, where the Dalai Lama was participating in functions.
The child who became the Dalai Lama at age 2 was born July 6, 1935, in northeastern Tibet. Both the spiritual and political leader of the country, the man now known as Tenzin Gyatso was forced to flee Tibet in 1959 after an unsuccessful rebellion against Chinese rule.
His government-in-exile is now based in Dharamsala.
The Dalai Lama retired from his political role in March 2011 but many young Tibetans in India still consider him the most important figure in the Tibetan struggle for independence, The India Express reported.
He was awarded the Nobel peace prize in 1989.