Batsman Shaun Marsh struck a fighting half-century at the Melbourne Cricket Ground on Monday to drive Australia to a commanding 326-run lead over India at the close of day four and all but seal the series for the hosts.
Leading 2-0, Australia need only draw the Melbourne match to wrap up the four-match series and India face a Herculean task to keep the contest alive for the final Test in Sydney next week.
The highest successful fourth innings chase at the MCG was achieved by England in 1928-29, when they compiled 332 for victory.
Though India's batsmen have proved the equal of Australia's bowlers for much of the series, the flat MCG wicket began to show signs of uneven bounce late in the day and the hosts laboured to 261-7 at the close.
Marsh's unbeaten 62 was important, both personally and for his team, and he showed commendable grit to see off India's pacemen who bowled with discipline and took three wickets after tea to expose the tail.
In partnership with Marsh, number nine batsman Ryan Harris also proved unflappable and he soaked up valuable time at the crease for his eight runs to stumps.
Marsh and debutant Joe Burns had resumed on 174-4 after lunch but Burns added only one run to finish with nine before being caught behind by India captain and wicketkeeper Mahendra Singh Dhoni off the bowling of Ishant Sharma.
Wicketkeeper Brad Haddin added only 13 before he was caught down the leg side by Dhoni off Umesh Yadav.
Mitchell Johnson swiped at a bouncer off Mohammed Shami and holed out for 15, finding Ajinkya Rahane at midwicket.
Rain delayed the resumption of play after lunch but Ishant kept India in the contest by removing Shane Watson for 17 before Yadav took the prized wicket of Australia captain Steven Smith for 14.
Dhoni's move to put a leg slip behind Smith for Yadav appeared a stroke of genius when the Australian captain nicked down the leg side straight to Rahane.
Spinner Ravichandran Ashwin then had Chris Rogers playing onto his stumps for 69 late in the session.
Ashwin also dismissed David Warner after a quickfire 40 midway through the morning, trapping the pint-sized batsman in front of the wickets.
India were dismissed within 15 minutes of the start of play for the addition of only three runs to their overnight score of 462-8, losing their last two wickets to paceman Johnson, who finished with 3-135.
Paceman Ryan Harris finished with figures of 4-70.