India struggled to break down the opponents' defence throughout the game and paid the price around 10 minutes from the end when Fitr Saari (49th minute) slammed home a penalty corner.
Malaysia thus ended the league stage of the tournament without conceding a goal.
India's loss means Britain will meet Australia in the final on Saturday.
Going into Friday's match, India were at the third position with seven points from four matches. They had the same number of points as Britain but were trailing on goal difference.
India will now compete for the bronze medal with New Zealand on Saturday.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
About VDC
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.