South Africa won the toss and elected to bowl first in the final as India amassed 298 for seven in their 50 overs before restricting their opponents to 246 in reply.
It is a third final defeat in a row for South Africa, who lost the last two T20 World Cup deciders to Australia and New Zealand respectively.
But this one may hurt the most, with captain Laura Wolvaardt's century in vain in the chase.
While there will no doubt be huge disappointment, South Africa had a fantastic tournament, even if it is another final loss in men’s and women’s cricket for a nation that have come so close on numerous occasions without getting over the line.
But it was India’s day, and a moment they have long waited for too after two previous 50-over final losses.
“We spoke that self-belief was there, even though we lost three back-to-back games (in the pool stage),” India captain Harmanpreet Kaur said. “We knew we had something special to turn things around.
“We knew this total is enough for a final because you always have a little extra pressure. We should give credit to South Africa, they batted beautifully. In the end, they panicked a little and that is where we cashed (in).
“This is the start. We wanted to break this barrier. And our next plan is to make this a habit. We were waiting for it. now this moment has come. So many big occasions are coming, and we want to keep improving. This is not the end, just the beginning.”
India's innings was anchored by the superb Verma as she put on 104 for the first wicket with Smriti Mandhana, who scored 45.
The latter was the first wicket to fall when she was caught by wicketkeeper Sinalo Jafta off the bowling of left-arm spinner Chloe Tryon, who took 1-46 in her seven overs.
South Africa had toiled for that breakthrough, but Verma fell with the score on 166 as she picked out Sune Luus at mid-off from the bowling of Ayabonga Khaka to stem the scoring rate.
Khaka was the pick of the South African bowlers with her lien and length and ended the innings with 3-58 in nine overs
The third wicket to fall was that of semi-final heroine Jemimah Rodrigues, whose brilliant century had helped India chase down a mammoth 339 for victory over Australia.
On this occasion Rodrigues presented a low, sharp catch to her great friend Woolvardt when she had 24. Khaka was again the bowler.
At the halfway point India looked like they would get a total well in excess of 300, but South Africa bowled a tight line and kept picking up wickets to slow the rate further in the second half of the innings.
India in fact managed only 65 from the last 10 overs, when they would have expected much more.
Richa Ghosh tried to up the tempo and reached 34 from 24 deliveries before she picked out Annerie Dercksen on the boundary to become Khaka’s third wicket.
Deepti Sharma managed a run-a-ball 58 and was the final wicket to fall as she attempted an ambitious second run off the final delivery and was run out.
South African seamer Marizanne Kapp, so excellent through this tournament, went wicketless with 0-59 in her 10 overs.
Wolvaardt continued her excellent from in the tournament with 101 from 98 deliveries, but she found few teammates who could stay with her.
If she was there at the end, South Africa would have won, but she fell with the score on 220 to a juggling catch from Amanjot Kaur, who grabbed the ball at the third attempt.
It was another supreme captain’s knock, but Wolvaardt was beginning to feel the pressure of dot balls and had to make the play.
She ends the tournament as the leading scorer with 571 runs at an average of 71.37 and a strike rate of almost 100. It is the most runs ever scored in a single World Cup.
Dercksen (35), Luus (25) and Tazmin Brits (23) all got starts, but no-one was able to build a meaningful partnership with Wolvaardt.
“I could not be prouder of this team for the campaign we had,” Wolvaardt said. “We played brilliant cricket throughout but were outplayed by India today. It’s unfortunate to be on the losing side but we will definitely grow from this.
“We did so well to put those couple of bad games behind us, we were either really good or really bad, but thankfully more of the really good. It’s been an amazing tournament for a lot of the players, and I’m proud of the resilience we showed.
“We were hoping for a little bit more swing (in India’s innings). There was still something in the wicket, so I still feel it was the right call to bowl. We were in it for a lot of the chase but lost too many wickets.”