India will face Nepal in a repeat of the 2010 Dhaka Games, at the Jawaharlal Nehru Stadium on Monday.
"Fortunately, we could convert our chances today and the day belonged to us. We will go all out against Nepal," coach Sajid Dar said after the win.
In the must-win match, India produced a wave of attacks in the early minutes with the strikers combining well up front along with Sasmita Malik.
Kamala Devi slotted the ball past the Bangladeshi custodian, following a clever flick by Bala Devi in the 37th minute to make it 3-0 at the break.
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India struck twice in two minutes after the break with substitute and U-19 player Sanju, who came in place of Prameshwori Devi, scoring a scintillating goal in the 71st minute, while Bala Devi completed the rout a minute later.
Earlier, Nepal blanked Sri Lanka 4-0 to top the group and finish with 10 points, while India ended second with eight.
An early 4th minute error by Sri Lanka's A Perera saw the defender head into her own goal to hand their favoured opposition the lead.
Nepal dominated throughout the match, plundering past the Sri Lankan midfield and defence to fire away shots on goal.
In the 27th minute, Niru Thapa failed to convert a cross delivered by Anita Basnet from the right while another opportunity was denied in added time when Sabitra Bhandari sent a low left footer only for it to be saved by a diving A Wijerathna.
However, Sabitra Bhandari beat the Sri Lankan defence in the 52nd minute before finding the top of goal to make it 2-0 for Nepal.
Bhandari's second goal came in the 63rd minute with a chipped ball over Wijerathna to put Nepal in total control.
Three minutes later, Wijerathna made a brilliant save to stop Dipa Rai. But she was beaten in the 80th minute when Sapna Lama scored following a rebound off the woodwork as Nepal sealed the issue in style.