Australia captain Michael Clarke made history at the SCG to leave India fighting to avoid defeat in the second Test.
India reached 114 for two in their second innings at stumps on day three, a day dominated by Clarke's unbeaten 329.
After achieving the highest score in the SCG's 100-Test history, Clarke declared at 659 for four midway through the second session.
Mike Hussey offered his skipper terrific support, scoring an unbeaten 150 to supplement Ricky Ponting's 134.
The tourists, after scoring just 191 in their first innings, trail by 354 runs with Gautam Gambhir (68 not out) and a watchful Sachin Tendulkar (8 not out) set to resume on day four.
But they can consider themselves fortunate to still be there.
Tendulkar narrowly avoided being bowled off an inside edge on seven while wicketkeeper Brad Haddin should have accepted a thick edge from Gambhir on 66 from James Pattinson's bowling.
The Indians' planned fightback began disastrously when opener Virender Sehwag slashed at a short and wide delivery from Ben Hilfenhaus (two for 37).
David Warner took a spectacular leaping catch at point to remove the dangerous left-hander for just four.
That brought Rahul Dravid to the crease and he got off the mark with a classy flick to the boundary in front of mid wicket.
But on 29 Hilfenhaus produced a sublime off-cutter to pass through the narrowest of gates and clip Dravid's middle and off stump.
It left India 100 for two as Tendulkar made his way to the middle of the SCG for the last time to the cheers of 31,644 fans.
Earlier, Clarke smashed a host of new records with a brilliant innings, while Hussey batted superbly at the other end.
The pair added 334 runs without loss to leave the deflated tourists staring down the barrel of a second consecutive defeat on Australian soil.
In all, the hosts added 622 runs for the loss of one wicket after Clarke and Ponting were united at 37 for three late on day one.
After breaking through for his maiden double century on day two, run-hungry Clarke picked up where he left off when play resumed.
His epic knock lasted 617 minutes, 468 balls and included 39 fours and a six.
The skipper's declaration left him five runs short of the highest Test score by an Australian captain, held by Mark Taylor on 334 (also Don Bradman's highest Test score).
Matt Hayden's 380 against Zimbabwe in 2003/4 remains the highest tally by an Australian while Brian Lara leads all comers with 400.
Hussey became the third century maker of the innings, bringing up his ton with a sharp single shortly before lunch.
The left-hander produced one of his finest Test innings, belting 16 fours and a six off 253 deliveries.