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For New Zealand, Nick Ross (47th minute), Jacob Smith (48th minute) and Hugo Inglis (57th minute) were the goal scorers while for India, Rupinder Pal Singh found the net in the 18th minute and 57th minute respectively.
India will next play Malaysia for the third place on Sunday.
Both teams started off on a positive note but it was India who dominated the first quarter by creating multiple circle penetrations.
Soon, New Zealand changed their strategy and started counter attacking and as a result Nick Ross came closest to the net by a reverse hit from the top of the box to the bottom corner.
Akash Chikte was alert to the danger though, smartly saving to ensure the scores stayed level.
India's first opportunity came through a penalty corner (PC) but it was saved by the black sticks Captain Shea McAleese.
India picked up the pace in the second quarter and started pressing high up the pitch every time they lost the ball.
It paid dividends in the 18th minute, as Akashdeep Singh robbed New Zealand of the ball near the circle and drove in, only for the attack to be smothered by George Enersen.
Off the rebound, Akashdeep struck a first time shot on goal, but the ball caught the foot of Kane Russell resulting in a stroke for India.
Rupinder Pal Singh made no mistake from the spot, dispatching the ball into the bottom left to give India the lead.
The shift increased the influence of Sardar Singh in India's midfield as he was afforded a lot of space to steer India's game. The teams went into half time with India leading 1-0.
In the third quarter, the teams went at each other with furious attacking intent, and again it was Chikte's agility that prevented New Zealand from scoring an equaliser.
A long cross field ball found Matt Rees-Gibbs at the far post and simple contact would've seen it sound the board.
Chikte though dived at full stretch to block away the attempt and kept India in the lead. Nikkin Thimmaiah had an attempt from the top of the box, after a superb bit of improvisation, but saw his effort sail high. India led 1-0 going into the final break.
In an action packed final quarter, New Zealand hit back with two quick goals, first via Nick Ross in the 47th minute, before Jacob Smith gave them the lead in the next minute.
Rupinder Pal Singh pulled one back with a PC conversion but that was not enough to save the game.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)