Captain Harmanpreet Kaur hit a fine half-century to help India towards their biggest victory ever in the competition - an 82-run hammering - in Dubai on Wednesday.
Kaur, who won her first toss in the tournament and elected to bat, smashed an unbeaten 52 off 27 balls which propelled India to 3-172.
Harmanpreet Kaur cracked a fine half-century for India. (AP PHOTO)
They then bowled out Sri Lanka for just 90 in 19.5 overs, with the Asian Cup holders now having no chance of making the knockout stages.
The big win bettered India's previous best 79-run victory against Bangladesh in the 2014 edition and also lifted their net run-rate to 0.576 after two wins and a shocking loss to New Zealand in group A.
India are now second behind Australia, level on four points, with the win boosting their chances of a place in the semi-finals.
India's opening pair of Smriti Mandhana (50) and Shafali Verma (43) laid a solid foundation as they combined in a 98-run stand off 76 balls.
Both batters fell off successive deliveries when Mandhana got run-out and Verma holed out in the covers off Sri Lanka captain Chamari Athapaththu's off-spin.
But Kaur, who hurt her neck during India's win over arch rivals Pakistan, bludgeoned pace and spin in the last five overs as she hit eight boundaries and an 84-metre six over wide midwicket.
She raised her half-century with a boundary off the final ball as India plundered 59 runs off the last five overs.
Sri Lanka's chase got off to a disastrous start when they crashed to 3-6 with fast bowler Renuka Singh claiming two wickets in her first two overs and Athapaththu edging off-spinner Shreyanka Patil to the lone slip.
Fast bowler Arundhati Reddy and leg-spinner Asha Sobhana both ended up with identical figures of 3-19 as India avenged their recent loss at the final of Asia Cup against Sri Lanka with an emphatic win.
Kavisha Dilhari top-scored with 21 and Anushka Sanjeewani made 20 while Ama Kanchana (19) was the only other notable contributor for Sri Lanka.
