India were all out for 465 to trail Australia by 65 runs on the first innings early on the fourth day of the third Test in Melbourne on Monday.
Mitchell Johnson snapped up the last two wickets in his opening two overs with the addition of only three runs to India`s overnight score.
India lost their last seven wickets for 56 after Virat Kohli (169) and Ajinkya Rahane`s (147) ground record 262-run partnership for the fourth wicket.
Johnson finished with three wickets for 135, while fellow paceman Ryan Harris claimed four for 70.
Australia will be chasing quick runs in a bid to get a result over the closing two days of the Test.
Australia only need a draw to win the four-match Border-Gavaskar Trophy after winning the opening two Tests in Adelaide and Brisbane.