Opting to bowl, India restricted Australia to 191 for six in the allotted 50 overs, before chasing down the target in 45.4 overs.
Aamir Gani (3/25) was the most impressive bowler from the Indian side while skipper Vijay Zol (64) and Akhil Herwadkar (60) were the main contributors with the bat at the Marrara Oval.
The loss dealt a blow to hosts Australia's hopes of entering the finals.
India have coasted through the tournament unbeaten and seemed untroubled in the hot Darwin conditions, and it was always going to be a difficult task for the Aussies.
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Lower-order cameos from Jake Doran (41 off 52 balls) and Cam Valente (28 from 25 balls) boosted the total, but Australia's earlier struggle to get the ball past the infield dashed their hopes of posting a defendable target.
Matt Fotia (2/34) and Short (1/10) were the wicket-takers for Australia.
While India top the table, Australia sit second ahead of third-placed New Zealand due to a superior run rate.
Speaking after the match, Australian U19 coach Stuart Law said: "In these games, you've got to be able to score runs at a fair pace and India have got some good batters; a few boys have played in the IPL already and have that experience. We've got some fantastic players too and as soon as they start understanding and believing it, we should start scoring a lot more runs."
The final will take place here on Friday.