Chasing 152 for a win, India ended at 142 for 9 with captain Harmanpreet Kaur top-scoring with 54 not out off 47 balls. Deepti Sharma and Shafali Verma chipped in with 29 and 20 respectively.
India ended their Group A campaign on four points after two wins and two losses.
Australia, who topped the group with all four wins, qualified for the semifinals while New Zealand (4 points) need a win against Pakistan on Monday to make it to the last-four stage.
Opting to bat, Australia were restricted to 151 for 8 with opener Grace Harris top-scoring with 40 off 41 balls. Stand-in captain Tahlia McGrath and Ellyse Perry chipped in with 32 each.
For India, Renuka Singh and Deepti Sharma took two wickets apiece while Pooja Vastrakar, Radha Yadav and Shreyanka Patil got one each.
Brief Scores: Australia: 151 for 8 in 20 overs (Grace Harris 40; Renuka Singh 2/24, Deepti Sharma 2/28).
India: 142 for 9 in 20 overs (Harmanpreet Kaur 54 not out; Annabel Sutherland 2/22, Sophie Molineux 2/32).
