India need a further 189 runs to claim victory in the final session of the fourth Test against Australia at the Sydney Cricket Ground.
The tourists started the session at 73-1 with Murali Vijay and Rohit Sharma unbeaten at the crease as they attempted to chase down their victory target of 349.
The duo earned their 50-run partnership off 141 deliveries, but after passing the 100-run mark Sharma fell for 39 when he was caught by Steve Smith off the bowling of Shane Watson.
Skipper Virat Kohli arrived at the crease to calm proceedings as he and Vijay decided to dig in for the next hour, while the opener notched his half-century off 135 balls.
The pair steadily guided India past 150 and to their 50 partnership before Vijay launched a late onslaught against Nathan Lyon to leave the tourists at 160-2 at the tea break, needing an aggressive push in the final session to secure their first win of the series.