Chasing a target of 281 on a slowish track, India were on course at 128 for 2 before a sudden middle-order collapse saw them lose four quick wickets as they were finally all-out for 241 in 48.4 overs.
This was India's first loss at skipper Mahendra Singh Dhoni's home ground in all the international matches that they have played so far.
India's No 1 batsman Virat Kohli (45) and opener Ajinkya Rahane (57) added 79 runs for the second wicket while skipper Dhoni disappointed the local fans managing a sedate 11 off 31 balls before Jimmy Neesham cleaned him up.
Especially against left-arm spinner Mitchell Santner (1/38) who bowled 34 dot balls in all and quite a few to Dhoni.
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It was Rahane's leg before off Neesham that triggered a collapse with Dhoni following the suit. Tim Southee then dealt a telling blow by removing Manish Pandey (12) and Kedar Jadhav (0) off successive deliveries -- both out to poor choice of shots. From 128/2, India slumped to 154/6 in just five overs and it became the turning point of the match.
Hardik Pandya's (9) inexperience also showed as he tried to hit an inside out lofted shot despite a fielder being placed at the extra cover boundary.
Axar Patel (38) and Dhawal Kulkarni (25) did try but that was never going to be enough for the 'Men In Blue'.
Southee (3/48) and Boult (2/40) were again on the money, so was Neesham (2/38) donning the third seamer's role to perfection.
The spinners gave away 102 runs in their 24 overs and bowled 70 dots which is equivalent to 11.4 overs without runs.
In pursuit of 261 on a pitch with variable bounce, India started off positively with Rahane returning to form in his 57 from 70 balls that had five fours and a six.
He along with Kohli laid the foundation before the chase went disarray.
Under pressure Dhoni was slow off the blocks before Neesham accounted for both of them in successive overs.
Once Pandey and Kedar were gone, India required 94 off 84 balls.
Axar and Amit Mishra (14)revived their hopes in a 38 partnership from 37 balls. But Mishra was run out after a poor judgment as it was all but over for India.
The medium pacer had Rahane plumb in the second ball of his new spell. The Indian opener had done all the hard work and batted beautifully on a tricky track where the odd ball stayed low but his dismissal with more than 100 shy of the target put the spotlight on the local hero Dhoni.
Dhoni looked under pressure and struggled to time the ball on the difficult pitch before being cleaned up by Neesham in the next over.
Practically-speaking, the chase was as good as over for the Kohli-dependent India but the crowd did not mind anticipating a Dhoni special in his possible last appearance.
But the nature of the pitch let down Dhoni on more than one occasions as he had some mishits and survived on till he completely missed the line to be bowled by Neesham.
At 135/4 in the 30th over, India needed a Kohli-like innings but there was no one to carry his bat through.
Pandey looked fluent with two elegant boundaries before Tom Latham timed his jump to perfection at mid on to cut short his innings as India lost Jadhav next ball to leave the chase in total disarray.
Opting to bat, New Zealand were off to their best start on the tour with Guptill slamming an 84-ball-72 studded with 12 boundaries.
Along with Tom Latham (39 from 40 balls; 4x4) he laid a solid foundation putting together 96 from 93 balls for the opening wicket before left-arm spinner Axar Patel (1/38) gave the much-needed breakthrough after a lacklustre performance by the seamers.
Guptill looked in full flow and completed his 31st ODI fifty from 56 balls but Hardik Pandya ended the threat inducing a thin edge of the Kiwi opener midway into their innings.
Williamson was foxed by the bounce and took an edge to Dhoni, while Neesham's mistime found Kohli at cover as India did well to arrest their progress.
Patel returned with tidy figures of 1 for 38 from his quota, while part-time off-spinner Kedar Jadhav returned wicketless but conceded just 27 runs from his eight overs to put brakes on New Zealand's brisk start.
Having started off with a maiden, India courtesy Kulkarni leaked 16 runs in the second over, a trend that continued till the powerplay with Guptill and Latham batting with ease against some lacklustre bowling by the seamers.
Brought in place of an indisposed Jasprit Bumrah in the solitary change to India XI, Kulkarni bowled full on a slow surface and Guptill, having assessed the condition in the first over, hit three exquisite boundaries to start off.
The left and right hand easily dissected the field with boundaries all around the wikcet and Dhoni continued with this pair for 10 overs before Mishra and Patel were brought in.
From 80 without loss in 10 overs, the spin duo's tight bowling brought the run-rate down before Patel gave the breakthrough denying Latham (39) a sixth fifty on this tour.
The left-hander took a top edge while trying for a slog sweep to a width deliery before Rahane took the catch at short fine leg.