Earlier, Ian Healy scored 90 and the debutant Gavin Robertson contributed 57 as Australia, starting the day at 193 for 7, batted until tea to make 328.
Their defiance helped Australia add 191 for the last four wickets after the top six had been removed for 137 on Saturday.
The 96-run stand between Healy and Robertson was Australia's highest for the ninth wicket against India, surpassing the 87 by Ian Johnson and Pat Crawford way back in 1956-57.
India, however, wiped off the deficit in style as Navjot Sidhu hit an unbeaten 55, reaching his second half-century of the match with two fours and a six off successive balls from Shane Warne.
Rahul Dravid was unbeaten on 18 on a day which saw just four wickets fall, in contrast to Saturday when 12 fell.
Third day; India won toss
INDIA - First Innings 257 (N S Sidhu 62, N R Mongia 58, R Dravid 52).
AUSTRALIA - First Innings
I A Healy c Ganguly b Raju 90
S K Warne c Tendulkar b Kumble 17
G R Robertson c Mongia b Srinath 57
M S Kasprowicz not out 11
Extras (nb3, lb6, b1) 10
Total (130.3 overs) 328
Fall (cont): 8-201, 9-297.
Bowling: Srinath 17.3-3-46-1; Harvinder 11-4-28-1; Kumble 45-10-103-4; Chauhan 25-3-90-1; Raju 32-8-54-3.
INDIA - Second Innings
N A Mongia lbw b Blewett 18
N S Sidhu not out 55
R Dravid not out 18
Extras (nb3, lb2, b4) 9
Total (for 1, 34 overs) 100
To bat: S R Tendulkar, *M Azharuddin, S C Ganguly, A Kumble, R K Chauhan, J Srinath, Harvinder Singh, Venkatapathy Raju.
Bowling: Kasprowicz 6-2-13-0; Reiffel 3-1-3-0; Robertson 9-3-17-0; Warne 8-2-43-0; Blewett 5-2-10-1; M E Waugh 3-0-8-0.
Umpires: S Venkataraghavan (Ind) and G Sharp (Eng).Reuse content