First innings heroes Marnus Labuschagne and Steve Smith steered Australia to an commanding 197-run lead in the high-stakes third Test in Sydney Saturday, leaving an injury-hit India with a mountain to climb.

They came to the crease after Will Pucovski and David Warner fell early, pushing them to 103 for two at stumps and a strong position with the four-Test series locked at 1-1.

Labuschagne, who scored 91 in the first innings, was not out 47 and Smith, who blitzed 131 in his first knock, unbeaten on 29.

Australia padded up again after taking eight wickets on day three to dismiss India for 244 in reply to the hosts' 338.

It gave them a handy 94-run lead, with India's task made harder by the absence of key spinner Ravindra Jadeja, who was sent for scans after a hit to the thumb while batting.

Australia put India under pressure on day three of the third Test
Australia put India under pressure on day three of the third Test AFP / DAVID GRAY

Wicketkeeper Rishabh Pant joined him in the clinic after a nasty blow to the elbow.

Their problems piled more misery on India, who were already without injured bowlers Mohammed Shami, Umesh Yadav and Ishant Sharma and batsman KL Rahul, while skipper Virat Kohli is on paternity leave.

Despite this Mohammed Siraj stepped up to remove Pucovski for 10, caught by substitute keeper Wriddhiman Saha, with the debutant unable to replicate the 62 he made the first innings.

Ravi Ashwin then took the prized scalp of David Warner for 13, his ninth career dismissal of the opener, trapping him lbw.

But the disciplined Labuschagne and Smith steadied the ship, building a 68-run partnership that is slowly taking the game away from India.

India were all out just before tea after some scintillating bowling and razor-sharp fielding, having resumed on a fine day at the Sydney Cricket Ground at 96 for two.

Australia's David Warner managed just 13 in the seond innings against India
Australia's David Warner managed just 13 in the seond innings against India AFP / Saeed KHAN

Pat Cummins took 4-29, including the stoic Cheteshwar Pujara for 50 while Josh Hazlewood removed a dangerous Pant after a breezy 36.

The pair's downfall saw the team crumble, with Ashwin and Jasprit Bumrah both run out, joining Hanuma Vihari who suffered the same fate earlier in the day.

A cautious Pujara began the day on nine and captain Ajinkya Rahane two after Hazlewood and Cummins dismissed openers Rohit Sharma (26) and Shubman Gill (50) on Friday.

Rahane, who scored a century in the last Test at Melbourne, had an escape on 16, with a Nathan Lyon delivery ballooning to Matthew Wade at short leg, who could only get his fingertips on the ball.

The skipper then whacked Lyon for six before his new-found aggression cost him his wicket, chopping a Cummins ball onto his stumps in the next over.

Pujara did what he does best at the other end, grinding out singles while occasionally opening his bat, bringing up his 26th half-century.

But the celebrations were short-lived, with Pant out two balls later, edging a Hazlewood delivery to Warner at slip.

And it got worse when Pujara was removed in the next over, gloving a rising Cummins ball to wicketkeeper Tim Paine.

India slumped, with Ashwin slow off the mark for a single and Cummins alert, making a quick throw to Labuschagne standing at the stumps.

It followed Vihari being brilliantly run out for four before lunch, attempting a run that wasn't there, with Hazlewood diving to his right and throwing the ball onto the stumps in one movement.

Bumrah became the third run out of the day, courtesy of a lightning-fast Labuschagne before Jadeja added 28 runs for the last wicket with Siraj.