India won the mega final 38-29.
The home team was trailing by 13-18 points in the first half, but a super raid from Ajay Thakur saw the game change and weigh in favour of India.
Thakur, who scored 12 points in the match, eventually finished the tournament with the highest point.
Thakur had little success in the last edition of Pro Kabaddi League as his selection was met with criticism.
But it was him who bailed India out in the game against Bangladesh and carried his rich form throughout the tournament.
He was well supported by Nitin Tomar, who scored half a dozen points.
Contrary to the previous matches, the Indian defenders failed to score points in the first half, as their Iranian counterparts scored them with ease.
However, with the resumption of play in the second half, they came back strongly in the game, helping the team secure some much needed points.
India had lost their first match to South Korea in a shock defeat.
The nation had last lost a game in the sport 23 years ago.
Recovering well from the loss, Anup Kumar and his men won the next round games with conviction.
This is India's third successive World Cup win in Kabaddi.
Kenya were named the emerging team of the tournament.
Jang Kun Lee who had a superb tournament was named the Most Valuable Player of the World Cup.
The best referee of the tournament award was given to SMA Mannan from Bangladesh.
Upon their win, Prime Minister Narendra Modi tweeted, "Congratulations to Indian team for winning the Kabaddi World Cup. The team showed exceptional skills, grit & determination. Well done!"
Sports Minister Vijay Goel too congratulated the team.
"Congratulations @IamAnupK & team! #OneBigBlue," his tweet read.
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