Yuzvendra Chahal took a career-best six wickets for 42 runs as India reduced Australia to 230 in 48.5 overs. India won the toss and put in Australia to bat first in the series decider in Melbourne on Friday after rain delayed the start of play.
Chahal matched Ajit Agarkar's 6-42 during India's 2004 tri-series to record the joint best-ever ODI figures on Australian soil.
Rain delayed the start of play by 10 minutes. The match was further delayed by 20 minutes after the delivery of two balls in the Australian innings.
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Bhuvneshwar Kumar struck early as he took the wickets of Alex Carey and captain Aaron Finch within the first 10 overs, giving India the initial boost.
After a poor start, Australia stuck its ground as Usman Khawaja and Shaun Marsh took the hosts past 100. They put on 73 runs off 85 balls for the third wicket. However, Chahal struck in the 23rd over as he took Marsh and Khawaja's wickets followed by that of Jhye Richardson and Marcus Stoinis.
Peter Handscomb and Glenn Maxwell managed to keep Australia afloat as Handscomb top scored with 58 runs. Handscomb's third ODI half century rescued Australia, who had lost four wickets for 61 runs in 13.4 overs. However, Chahal got rid of that threat as well.
Bhuvneshwar Kumar took two wickets for 28 and Mohammed Shami took the crucial wickets of Maxwell and Billy Stanlake.
The ODI series is levelled at 1-1 after Australia won the first match in Sydney by 34 runs and India won the second match at Adelaide by 6 wickets.