Tam, 28, started the first round in an attacking fashion but was not precise, while her opponent, the defending champion, demonstrated her experience and skill by landing a series of right hooks.
The Vietnamese boxer received a yellow card for pushing her opponent in the first round, while the Indian got one for holding onto Tam’s neck in the second round.
Though her punches were more precise in the second round, Tam was unable to consistently reach her opponent in the third round as Zareen kept her distance.
The 26-year-old Indian won the bout 5-0 to also win a US$100,000 cash prize along with the gold medal, while Tam got $50,000 and a silver medal.
Tam is the first Vietnamese to ever enter a world boxing championship final.
She is set to defend her SEA Games gold medal in Cambodia and Asiad silver medal in China this year, the latter also a qualifying event for the 2024 Paris Olympics.
Tam, from the northern province of Thai Binh, has twice won the Asian gold in 2017 and 2022.