Australia face an uphill battle to save the second Test after closing day two on 102-4 in reply to India's first innings score of 469 in Mohali.
From an overnight 311-5, India were all out for 469, with Sourav Ganguly, who retires at the end of the series, making 102, his 16th Test century.
Mahendra Dhoni hit four sixes in an entertaining 92, but was last man out.
Australia plunged to 17-2 soon after tea, and debutant Amit Mishra removed Michael Clarke in the final over.
The debutant bowled a perfect googly from around the wicket into Clarke's pads to give umpire Asad Rauf one of the easiest lbw decisions he will ever see. Clarke had looked one of Australia's most comfortable batsmen, but he was gone for 23