Grace Scrivens' youngsters had successfully defended 100 to beat Australia in their semi-final, but after being put in to bat in Potchefstroom, they managed a meagre total of 69.
Ryana MacDonald-Gay top-scored for England, making 19 from 24, with only four batters able to reach double figures.
England lost wickets consistently to the Indian attack - which had just one seamer - as they slid from 16 for three to 68 all out.
India played a composed innings, with a batting line-up that included full international Shafali Verma at the top of the order.
Verma made 15 from 11 balls to set the tone, and although England claimed two quick wickets to gain a bit of momentum, the duo of Soumya Tiwari (24 not out) and Gongadi Trisha (24 from 29 balls) made quick work of England's below-par total.
England captain Scrivens hailed her side for their attitude throughout the competition.
"Obviously it's a hard pill to swallow and the girls are a bit gutted," she said. "But I think the way we played throughout the tournament was unbelievable."
When asked what she said to the players following England's disappointing first-innings collapse, Scrivens said: "(The message was) let's keep backing ourselves and let's try and go again, but it's a tough one when you're trying to defend a low score.
"But I think we still backed ourselves - obviously India batted well and made well of that total."