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Defender Jugraj Singh broke the Chinese defence as he scored a rare field goal in the 51st minute to hand his team the title.
It was India's fifth consecutive win in the six-team competition.
India have not visited Pakistan since 2008 and the arch-rivals meet only at multi-team events.
India have not yet confirmed participation and there is speculation that the International Cricket Council could use the hybrid model' and hold the country's matches at a neutral venue if the team does not get government clearance to travel.
The team will continue to be led by ace drag-flicker and defender Harmanpreet Singh while prolific midfielder Hardik Singh will be his deputy.
India defeated arch-rivals Pakistan 4-3 in a thrilling bronze-medal match.
Pakistan also suffered defeat in the semifinals, losing 5-6 to Korea earlier.
Dilpreet Singh scored a hat-trick as India crushed the neighbours 9-0.
Manpreet Singh will lead the 20-member Indian team.
It was a keenly-contested battle between the two finalists of last edition but once again Australia came out on top in the shoot-out to clinch their 15th Champions Trophy title.
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