Deepika slotted the rebound in from a penalty corner in the 60th minute of the game to give her team a memorable victory.
Earlier, Deep Grace Ekka converted a penalty corner to take India into the lead in the 13th minute before China equalised in the 44th minute through a field goal from Zhong Mengling.
The welcome result for the Indian women's team comes days after men beat Pakistan to reclaim the Asian Champions Trophy in Kuantan, Malaysia.
Having learnt from their group stage encounter, India refused to let China take early control of the ball, closing them down high up the pitch, often intercepting their passes and constantly putting pressure by hunting in packs.
More From This Section
When in possession, the Indian eves held their nerve and passed the ball around neatly to penetrate China's circle.
This slightly different approach to their game compared to yesterday helped them earn India's first PC of the game in the 13th minute.
Going into the second quarter, India kept up the pressure by playing disciplined hockey, keeping their calm only to deny the Chinese a chance to equalise.
However, the third quarter saw China's Mengling Zhong penetrate the Indian circle to score a quick field goal. But the Indian eves were unrelenting and were playing the kind of hockey that had China on the backfoot.
China managed to earn their first PC of the match in the third quarter but failed to convert, sending the ball way off the baseline.
It was a do-or-die situation for India and it was their best chance to score. Deepika, the highest goal scorer of the tournament took the onus on to herself to convert a sensational goal with just 30 seconds to go for the final hooter, sending the Indian supports into bursts of cheers.
Besides this, the federation also announced Rs 1 lakh for the other support staff of the team. A cash award for Rs 1 lakh was announced for Deepika, the highest Scorer of the tournament.