The Three Lions gave themselves every chance of winning the trophy by restricting the opposition to 129 in their innings, which had been reduced to 20 overs because of rain delays.
However, a batting collapse ensured that India became the last-ever team to win the tournament, which will now be scrapped.
"First, credit must go to the ground staff," the skipper told Sky Sports News. "We wanted it in our hands, an opportunity to win the trophy and we came up a little bit short today.
"I thought we bowled well, 130 you'd take that to chase but it was probably a slightly harder wicket to bat than we probably thought. It is just tough to take at the minute.
"That pitch turned a lot towards the end and it was very surprising that it turned as much as that, but credit to the way the Indian guys bowled. We were almost there. It was in our hands. I'm proud of the way the lads played in this tournament."
England were beaten in the final of the 2004 Champions Trophy by the West Indies.