After restricting the minnows to a modest 189, the fancied hosts started off with a flourish but lost wickets in a heap before scampering home with 81 balls to spare in what turned out to be another hard-fought win for the hosts.
Yuvraj Singh (51 not out) played another responsible knock to guide the team to the victory target on a slow Ferozeshah Kotla track.
Virender Sehwag (39), Gautam Gambhir (28) and Sachin Tendulkar (27) got the starts but failed to make it count.
With this win, India consolidated their position atop the points table with seven points and were almost certain to qualify to the quarter finals from the group.
Yuvraj hit a boundary to not only notch up his half century but also bring about the victory, sending a near capacity crowd at the Kotla into a frenzy.
India will now travel to Nagpur to play their next match against South Africa on Saturday.
But it was not a very convincing performance by the Indians as they were made to sweat for the win by the minnows who had lost all their earlier matches by huge margins.
Chasing the paltry target, Sehwag spanked the first ball off pacer Mudassar Bukhari to the mid wicket boundary to launch the Indian innings with a flourish. Tendulkar opened his account in similar fashion by glancing Ryan ten Doeschate to the fence.
Tendulkar completed 2000 runs in the World Cup in grand style as he spanked ten Doeschate for three consecutive boundaries to entertain the crowd.
In the next over, it was Sehwag`s turn to massacre the Dutch bowling as he blasted Bukhari for three boundaries, although he could have been caught by Eric Szwarczynski at mid on. He was on 16 then.
With runs coming much too easily, Dutch captain Peter Borren introduced left-arm spinner Peter Seelaar in the sixth over of the innings.
The Indian openers put on 69 brisk runs before Seelaar provided the breakthrough for the Dutch by getting the prized scalp of Sehwag, whose 26-ball 39 contained five fours and two sixes.
Sehwag went for a cut but only succeeded in hitting the ball straight to Alexei Kervezee at point.
The Indians promoted Yusuf Pathan to the number three slot and the lanky all-rounder got into the act immediately by clobbering Peter Borren for a six.
Tendulkar`s belligerence did not last long as he became Seelaar`s second victim. He went down the track for a big shot but could not control it and Bradley Kruger took a well-judged catch at long off. His 22-ball 27 was laced with six boundaries.
The hosts suffered a big jolt a few balls later when Pathan also returned to the pavilion, offering a simple return catch to Seelaar for his third wicket. Virat Kohli also joined him soon.
From a comfortable 69 for no loss, the hosts suddenly slumped to 99 for four leaving the crowd stunned.
Gautam Gambhir and Yuvraj then steadied the innings to some extent with a 40-run partnership before Bhukhari broke their association by castling the left hander.
Earlier, three Dutch batsmen -- Eric Szwarczynski (28), Wesley Barresi (26) and Tom Cooper (29) -- got the starts but could not translate them into big knocks as the minnows lost wickets at regular intervals on a placid Ferozeshah Kotla track.
The opening pair put on 56 runs but the other batsmen succumbed rather tamely against a disciplined Indian bowling attack which exploited the conditions well. The visitors could have been in bigger trouble had it not been for Borren`s 36-ball 38 and Muddasar Bukhari`s (21) late onslaught.
Zaheer Khan was the pick of the Indian bowlers with 3 for 20 while Yuvraj (2/43) and Piyush Chawla (2/47) were the other wicket-takers.
The Dutch openers put on 56 runs for the first wicket before leg spinner Chawla provided the breakthrough for the Indians by getting rid of Szwarczynski much to the delight of the home crowd.
Chawla, who has been a trifle disappointing in the previous matches, got the wicket with a googly as the batsman tried to cut the ball but only to see his stumps being knocked down.
The Netherlands lost their second wicket just eight runs later with part-timer Yuvraj claiming his 100th ODI wicket when he accounted for Barresi who seemed to be quite comfortable at the crease.
Barresi was hit on the pads with a delivery that straightened after pitching and umpire Steve Davis had no hesitation in ruling him out.
Barresi asked for a review and there was no change in the decision. The only bone of contention was whether the ball hit the bat before hitting the pad. Replays show that it hit his the front pad first.
Yuvraj struck for his team again by dismissing Netherlands` key batsman Ryan ten Doeschate (11) who failed to time his shot properly and Zaheer took a well-judged catch at long off just a few metres within the boundary.
Then it was Nehra`s turn to take the spotlight as he got rid of Tom Cooper with a brilliant off-cutter and captain Dhoni made no mistake with the edge.
Bas Zuiderent, who joined the action after Cooper`s dismissal, did not trouble the scorers much as Zaheer sent him back to the pavilion with a gem of a delivery which came in sharply and trapped the batsman in front of the wicket.
Zuiderant went for a review and the third umpire also vindicated Davis` original decision.
A few minutes later, Tom de Grooth was run out going for a suicidal run and the Dutch innings lay in tatters.
From a rather comfortable 99 for two, the Dutchmen suddenly slumped to a precarious 108 for six as India`s pace bowlers made a much better impression with the old ball.
Captain Borren hit some lusty shots in the fag end of the innings to take the Netherlands score beyond the 150-run mark which looked doubtful at one stage.