The Manipuri lad was trailing 5-6 after the end of third round but made a remarkable fightback in the final round to beat Schneider Marcel of Germany 12-8 in a dramatic final bout.
With Narjit's victory, India's medal tally swelled to nine with two gold, one silver and six bronze.
India had claimed the first gold medal in the Games on Friday, when sailors Mahesh Ramchandran and Girdhari Yadav won the enterprise class in Mumbai.
Four other Indian boxers -- Harikishan Beliwal (fly), Light welter Satya Raju, Bhagyarajan in Welter category and Mohinder Thapa in Light Heavy -- collected a bronze medal each on Friday after the they were eliminated by their respective rivals in semifinal bouts.
Narjit had defeated Korean Jang Kwan Sik 18-11 on Friday to make it to the bantam weight final.
Photograph: SnapsIndia