Australia were battling to avoid their first defeat since the 2005 Ashes series after India seized control of the third Test at the WACA on Friday.
The Indians piled on 294 in their second innings to set Australia a near-impossible target of 413 to win, then picked up two early wickets to leave the home team in deep trouble when play ended on the third day.
The Australians limped to stumps on 65 for two in their second innings, still 348 away from an increasingly unlikely victory, with captain Ricky Ponting unbeaten on 24 and Mike Hussey on five not out.
With two days to go and the WACA pitch still holding up well, there is plenty of time for Australian to manufacture a world record 17th consecutive Test win, although history is heavily stacked against them.
Only one side in 131 years of Test cricket have ever scored more runs in the fourth innings to win a test. That was in 2003 when the West Indies made 418-7 to beat Australia in Antigua.
No team has scored 370 or more batting last to win on Australian soil and Ponting's team will need to produce a dramatic improvement on their first innings when they were skittled out for just 212.
Their chances were not helped when they lost openers Chris Rogers and Phil Jaques cheaply as the Indian seamers charged in from both ends on the bouncy pitch.
Rogers, who is making his debut at age 30 as a replacement for the injured Matthew Hayden, was caught by wicketkeeper Mahendri Singh Dhoni for 16 off the bowling of Irfan Pathan.
The left-arm seamer also dismissed Jaques, caught by Wasim Jaffer at fourth slip for 15, leaving Ponting and Hussey to survive a hostile last half hour to the close.
At one point, the Australians looked as though they would be chasing a much smaller target when they ripped through the Indian top-order, reducing the tourists to 160-6 just after lunch.
BIG SCORES
Sachin Tendulkar (13), Rahul Dravid (3) and Sourav Ganguly (no score) had made a combined total of 16 runs but Vangipurappu Laxman, who has a knack of making big scores against the Australians, was once again a thorn in their side.
He top-scored with a patient 79 and shared two vital partnerships, a 75-run stand with Dhoni for the seventh wicket to initially halt Australia's momentum, then a 51-run ninth-wicket stand with Rudra Pratap Singh to push the final target past 400.
The Australian fast bowlers had to toil hard for their wickets on another hot day at the WACA. Stuart Clark captured four wickets, Brett Lee got three and Mitchell Johnson one, while all-rounder Andrew Symonds collected two in one over when he gave up bowling medium pace and switched to off-spin.
Nightwatchman Pathan frustrated the Australians with bat and ball. He occupied the crease for two hours in scoring 46, while Dhoni made an adventurous 38 that featured two huge sixes and R P Singh made a useful 30 to keep the tail wagging.Australia are bidding for a world record 17th consecutive test win after equaling their own mark of 16 with victory in last week's second Test in Sydney.
Australia also won 16 in a row between 1999 and 2001 but their streak came to a shuddering halt when they were beaten by India in Kolkata.