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Rain played spoilsport in India's push for a 2-0 series win on the fifth and final day and the hosts escaped with a draw after they were down 281 for eight in the post-lunch session in chase of a near impossible 617 for a win.
The visitors will have to be content with a 1-0 victory in the three-match Test series after India won the first match in Hamilton by 10 wickets and drawing the second in Napier.
Despite the draw, India ended their long wait of 41 years to win a Test series in New Zealand after Mansur Ali Khan Pataudi-led side drubbed the Kiwis 3-1 in 1968.
The Indians, who outplayed the Kiwis throughout the match, were well on course for a victory by conjuring up four wickets in just over a session before light rain stopped play 30 minutes into post lunch session. Daniel Vettori on 15 was at the crease at that time along with Iain O'Brien (19).
There was a glimmer of hope for India recording their 100th Test victory as covers were taken off for a short while to resume the post-lunch session half an hour after stoppage.
That hope disappeared as rain returned immediately and light shower turned into heavy downpour. The match was finally called off at 1015 hrs IST, nearly one and half hours before scheduled close.
Zaheer Khan, who took five wickets in Kiwi first innings, ended the Test with figures of seven for 122 while Harbhajan Singh, with his 4/59 in New Zealand second essay, had match figures of seven for 102.
India claimed three wickets in the morning session after being frustrated for more than one hour by Ross Taylor (107) and James Franklin (49) who stitched a 142-run partnership for the fifth wicket.
Sachin Tendulkar took two crucial wickets -- of Brendon McCullum and Franklin -- in the last 15 minutes of morning session after Harbhajan had broken the fifth wicket stand by dismissing Taylor.
Harbhajan struck again in the second over after tea removing Tim Southee to reduce New Zealand to 258 for eight and set India on course to a deserving victory, before rain played spoilsport after a few minutes.
Southee got the outside edge of a Harbhajan floater just outside the off-stump which straightened instead of turning and Mahendra Singh Dhoni did the rest behind the wicket.
Tendulkar, in what could be his last Test appearance in New Zealand, could have claimed his third victim immediately after but for butterfinger Ishant Sharma. O'Brien swept straight to Ishant off a Tendulkar full toss but the gangling Indian pacer failed to hold on to it at square leg.
Earlier, resuming at their overnight score of 167 for four on an extremely windy day, New Zealand made steady progress through their overnight pair of Taylor, who went on to complete his fourth Test century, and Franklin.
India's quicker bowlers struggled to cope with the strong winds and fielding was also a bit sloppy with Gautam Gambhir and Munaf Patel dropping Franklin and McCullum respectively.
Taylor helped himself to three quick boundaries off Ishant to ease into the 90s before a leg-glance off Harbhajan took him to his second century in as many Tests in this series.
It was Harbhajan who broke the dangerous-looking fifth-wicket partnership by accounting for Taylor, who played inside the line of a full-length delivery only to see the ball keep going away from him and hit the middle stump.
Taylor's 107 came off 165 deliveries in 261 minutes, and contained 16 hits to the fence. Alongside Franklin, he put on 142 in 279 balls for the fifth wicket, a New Zealand record against India.
Then a smart move by visiting captain Dhoni to bring in Tendulkar into the attack yielded results and the little master struck twice in the last 15 minutes of an extended morning session.
Tendulkar immediately troubled Franklin no end with his mixture of leg-spin and googlies. But, it was McCullum (6) who was Tendulkar's first victim, adjudged caught at slip by Rahul Dravid as he went for a big drive though television replays suggested there might not have been any contact between bat and ball.
In his next over, Tendulkar trapped Franklin in front for 49 to take India closer to victory only to be denied that by rain in the post lunch session.
President Patil congratulates Team India
President Pratibha Patil on Tuesday congratulated the Indian cricket team for winning the Test series in New Zealand in 41 years.
The President conveyed the message soon after the third and final Test in Wellington ended in a draw, giving India a 1-0 series victory.
India won the first Test in Hamilton by 10 wickets while the second Test in Napier ended in a draw.
The Indian team, led by Mahendra Singh Dhoni emulated the feat of the side captained by Mansur Ali Khan Pataudi, who had last won a Test series in New Zealand in 1967-68.