Grace Stewart's 37th-minute field goal gave the hosts the win to set-up a title clash with New Zealand, who overcame England 2-1 via penalty shootout in the other semi-final.
India started the first quarter on a positive note. They created a goal scoring opportunity through precise passing in the second minute which saw Vandana Katariya make a darting run on the left flank and give a pass to skipper Rani, whose shot was saved by Australian goalkeeper Rachael Lynch.
The following minutes saw Australia win two consecutive penalty corners but the Indian defence was resolute.
The second quarter was a more balanced one.
The World No. 5 team tried to attack the Indians in the 16th minute but Jane Claxton's shot went wide.
Australia were dominating possession but India's defensive unit denied the hosts any goal scoring opportunities.
India, on the other hand, could not create a real impact on the match as they struggled to deal with Australia's high defensive line.
A neck-and-neck second quarter meant that the teams went into the half-time break goal-less.
Early in the third quarter, Australia were awarded a penalty corner but the resulting drag-flick was hit too high by Edwina Bone.
The hosts showed their attacking quality in the initial few minutes after the restart as Emily Hurtz also made a great forward run on the left baseline but her pass inside was well defended by India's Lilima Minz, who pushed the ball away from danger.
In the 37th minute, Australia's constant pressure was rewarded. Savannah Fitzpatrick's pass from the right flank outside the circle was hit first-time by Grace Stewart into the back of the net.
It proved to be a crucial goal in the match as the defending champions took a crucial lead. The World No. 10 team could not relieve the pressure as they could not stitch together a string of passes.
However, the Indian team came out attacking in the fourth quarter as they looked to get the equaliser and keep their hopes of qualifying for the final match.
In the 47th minute, India earned themselves a penalty corner as the ball hit an Australian foot inside their circle but it did not produce any goal.
Two more penalty corners in the next minute were wasted as Gurjit Kaur's drag-flicks were well defended by the first rusher.
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