The court heard Karauria had effectively hatched a plan with an alleged co-offender over a period of days to steal a car and then befriended Dhiman to set him up.
The 30-year-old drove them out to Matahorua Rd where the defendant stabbed him nine times.
One of the strikes would prove fatal but didn't immediately kill Dhiman, who managed to stagger to the roadside before collapsing.
Karauria then stomped on the man's head to make sure he was dead before he got back in the car.
As the defendant drove away in the deceased's car he noticed Dhiman was still moving so he returned and continued the attack.
The man was found in the roadside ditch 12 hours later by a passing truck driver, who could see his body from a heightened vantage point.
At the end of December, Indian media reported Dhiman was an IT professional, who shifted to New Zealand on a study visa in June, 2015, and worked as a fibre technician for a leading company.
After he died, his body was taken home to Kharar and cremated.
Yesterday, Justice Simon France said he had received three heartfelt victim impact statements from Dhiman's family who had no forgiveness, only anger, for what the teenager had done.
"I think anyone hearing these facts will be struggling to believe them.
"Planning to steal a car is one thing but literally planning, as you did, to kill the person as well is so callous and unnecessary as to defy belief."
Justice France told the defendant he was too young; too young to be living the life he had been and too young to carry out such a horrific act.
"Days in court like today are truly days of dismay. Dismay at the loss of life, dismay that a 17-year-old amongst us has done it and that a 17-year-old will be sentenced to life imprisonment."
The court heard Karauria, born and raised in Hawke's Bay, lost his father when he was 11 and had conflict with his mother's new partner.
He had slept on the street at times, spending time in Wairoa and Taranaki, and left school early with no qualifications.
His lawyer Eric Forster accepted there was a serious degree of violence in the case but submitted his client was remorseful and had acted spontaneously in his youth.
He noted the teenager had turned himself in to police the day after the murder, with the clothes he had been wearing, and said a minimum jail period of 12 years would be appropriate.
Crown prosecutor Steve Manning submitted a minimum jail period of 15 years would be appropriate for Karauria considering the "extensive brutality" of the case.
He said the defendant's remorse and youth should not be considered mitigating factors as they were secondary to the violent offending.
Justice France adopted a minimum non-parole period of 12 years, saying he considered a minimum jail term of 17 years would be manifestly unjust.
While the teenager had a difficult upbringing and struggled with mental health and alcohol issues, reports failed to explain why he was responsible for such a callous murder, the judge said.
Justice France said a courtroom was not the place to answer such questions but added it was important that society kept searching for the answer as a jail term would do little to comfort the community in which the murder took place in.
One of the women in support of Karuaria quietly wept in the public gallery during the sentencing and was later hugged by others outside the courtroom.
Justice France sentenced Karauria to life imprisonment with a minimum non parole period of 12 years.
Karauria was also sentenced to three years' imprisonment for the aggravated robbery charge, to be served concurrently.
