Thaworn, who was playing one flight in front of Ramsay, birdied the last hole in regulation play when his seven iron approach shot landed about one feet from the hole as he closed with five-under-par 66 at the approximately US$1.25 million Asian Tour event.
Overnight leader Ramsay needed a par putt on the last to win but made a three-putt bogey for a 68 as the duo returned to the par four 18th hole at the Karnataka Golf Association course.
On a day filled with drama, Ramsay blasted his tee shot into a watery creek and was penalized. His third shot landed in the back of the green and he chipped to about 10 feet past the hole as he two-putted for double bogey.
Meanwhile Thaworn, who won the Hero Indian Open in 2005, made a two putt bogey for the win after hitting his second shot into the greenside bunker. He was stunned by his victory which propelled him to the top of the Asian Tour Order of Merit.
"To be honest, I didn't expect to win with the way I was driving the ball this week. It means a lot that I've won a second Hero Indian Open title and that I'm now leading the Asian Tour Order of Merit," said Thaworn, who totalled 14-under-par 270 and won US$198,125.
Thaworn, who was two shots off the lead at the start of the day, struggled with his driver but rallied with acute iron play and a sharp short game in a round of six birdies against one bogey.
"I think I only found two fairways in regulation and I didn't see where Richie was on the 18th hole until the crowd started shouting. It was a huge surprise to me but I'm glad I won," he smiled.
Ramsay, who was playing on a sponsor's invitation, tipped his to Thaworn but rued an unlucky break in the play-off as his remarkable third shot, which he hit over the trees, landed in a pitch mark just after the green.
"I stayed committed to every shot but Thaworn played good. It was mine to win and a very strange thing happened on the last because I've been excellent under pressure the whole week," said Ramsay.
"I had a great third shot in the play-off which landed at the back of the green. If there was a good lie, I would have fancied knocking that in. I could have gotten a very easy up-and-down but it was lying in a bad pitch mark. Some days, things just don't go your way," he added.
Thai rising star Panuphol Pittayarat bogeyed the last hole to finish one shot from the play-off while Shiv Kapur was the best Indian golfer as he shot a 66 for fourth place on 272.
Anirban Lahiri of India, a two-time Asian Tour winner, Arnond Vongvanij of Thailand and Jaakko Makitalo of Finland were a further two shots back in fifth place.
Kapur, who has four top-five finishes on the Asian Tour this season, was delighted to continue his solid form where he posted a flawless round highlighted by five birdies.
"I'm happy but not satisfied. I just wanted to go out there and shoot my heart out. This is my national open and Hero is my sponsor. Obviously I would have liked to win but fourth is not bad. My streak of top-five continues," said Kapur.