Sri Lanka, however, lost 4-1 at the Ambedkar Stadium Friday.
AIFF general secretary Alberto Colaco regretted the inconvenience.
'According to new Asian Football Confederation (AFC) rules greater number of points obtained in matches between the two teams is taken into account. Since India have beaten Sri Lanka 3-1 they are through to the final.' he said.
Bob Houghton said that he came to know about India entering the final only this morning.
Houghton, however, supported the rule.
'I think it is a good rule as the better team gets a fair chance,' he said.
Sri Lanka assistant manager Sumit Walpola said: 'we did know about the rule but we can't complain because we lost 1-4.'