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I would say being able to sit cross legged can be challenging for many people and can take time to be able to get into this position comfortably. I would not force yourself into this position if it is causing pain in your knees. I think you are correct that you are potentially lacking some ER of the hip. Could also be tightness in the abductors as well. Try working on these two areas and test and retest and see if its better, same, or worse when trying to get into the cross legged position. Here are a few routines to try out: