The victory enabled the India Under-19 team finish their league engagements unbeaten. They had earlier beaten South Africa and Zimbabwe.
Iyer sizzled with the bat, scoring 109 off just 67 balls, studded with 10 fours and six sixes as the hosts amassed 321 for five.
He also stitched a valuable 170-run partnership for the fourth wicket with Ricky Bhui (66 67b, 6x4, 2x6) to take the team past the 300-run mark.
Even opener Akhil Herwadkar chipped in with a half-century.
In reply, the Australians were 156 for three in 30 overs before rain stopped play.
The Indians won via the Duckworth-Lewis method.
Opting to bat, the Indians got off to a decent start with openers Ankush Bains (20) and Herwadkar (56) giving the team a platform to build on.
After Bains's dismissal, Vijay Zol (38) continued in the able company of Herwadkar. The duo played with a lot of responsibility and put on 62
runs for the second wicket before Herwadkar was sent back by Kelvin Smith after a well-made half-century that came off 65 balls, with the help of eight hits to the fence and a six.
New batsman in Iyer dominated from the start and did not show any mercy to the Australian bowlers during his innings.
Iyer and Bhui sent the Aussie bowlers on a leather hunt with some fine batting.
It was Ben Ashkenazi, who claimed the prized wicket of Iyer, while Matthew Fotia saw off Bhui. But, by that time, the damage was done and the hosts were in control on 300 for five in 47.3 overs.
Sharfaraz Khan (9) and Deepak Hooda (13) also chipped in with important runs in the end.
For Australia U-19, Kelvin Smith finished with two for 64, while Ashkenazi (1-43), Fotia (1-44) Tom Andrews (1-54) took a wicket each.
Chasing a massive target, the Australian top order did well, with opener Smith top-scoring with a 76-ball 74, including eight fours and a six.
Damien Mortimer (31) and Jaron Morgan (29) also added some runs to the total but they were 18 runs behind in the calculations done when heavens opened up.
Brief scores:
India Under-19: 321 for 5 in 50 overs (Shreyas Iyer 109, Ricky Bhui 66, Akhil Herwadkar 56; Kelvin Smith 2-64).
Australia Under-19: 156 for 3 in 30 overs (Kelvin Smith 74; Kuldeep Yadav 1-18).
Image: Shreyas Iyer
Photograph: Andhra Cricket Association
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