Australia ripped out seven Indian wickets in the final session of the fourth test in Melbourne on Monday to win by 184 runs and go 2-1 up in the five-match series.
India collapsed to 155 all out with just 12.5 overs left in the match at the Melbourne Cricket Ground and will need to win the final test starting in Sydney on Friday to level the series and retain the Border-Gavaskar Trophy.
Australia captain Pat Cummins, who took 3-28, removed top-scorer Yashasvi Jaiswal for 84 as India's last seven wickets fell for 34 runs from 20.3 overs.
Set an unlikely 340 runs to win, India looked well placed to save it when Jaiswal and Rishabh Pant batted through the entire second session to be 112-3 at tea.
However, the departure of Pant for 30, caught in the deep from a wild shot off part-time spinner Travis Head, sparked their collapse.
Ravindra Jadeja and first-innings centurion Nitish Kumar Reddy came and went quickly before Cummins ended Jaiswal's gritty 208-ball knock in controversial fashion.
The 23-year-old was given not out to a caught-behind appeal from an attempted hook.
But the decision was overturned by the TV umpire on visual evidence that the ball had changed direction, even though no noise was picked up by technology.
Akash Deep was caught at short leg off Scott Boland (3-39) before Jasprit Bumrah scored his second duck of the match and Mohammed Siraj was the last man out, trapped lbw by Nathan Lyon, who finished with 2-37.
A tenacious Washington Sundar was left not out five after facing 45 balls.
India's hopes were rocked in the first session when veteran batsmen Rohit Sharma, KL Rahul and Virat Kohli all departed for single figure scores.
Cummins completed an inspirational test, taking 3-38 and six wickets in all adding to scoring 90 runs, the best batting match tally of his career.
AUSTRALIA: Usman Khawaja, Sam Konstas, Marnus Labuschagne, Steve Smith, Travis Head, Mitch Marsh, Alex Carey, Pat Cummins, Mitchell Starc, Nathan Lyon, Scott Boland.
INDIA: Yashasvi Jaiswal, KL Rahul, Rohit Sharma, Virat Kohli, Rishabh Pant, Ravindra Jadeja, Nitish Kumar Reddy, Washington Sundar, Jasprit Bumrah, Mohammed Siraj, Akash Deep.