Stuart Clark and Brett Lee claimed four wickets apiece as Australia established a 147-run lead over India on day two of the first Test in Melbourne.
The world's best Test team added just six runs to their overnight total in the morning session before bowling their opponents out for just 196 in reply.
Openers Mathew Hayden and Phil Jaques then took the hosts to 32-0 in their second innings to ensure Australia were in total command at the close of play.
Sachin Tendulkar had earlier scored the 48th Test half-century of his career as India replied to Australia's first innings total of 343.
But Clark dismissed opener Rahul Dravid (five), Tendulkar (62), Yuvraj Singh (duck) and Mahendra Singh Dhoni (duck) to leave India's innings in tatters.
Fellow paceman Brett Lee picked up the wickets of opener Wasim Jaffer (four), VVS Laxman (26), Anil Kumble (27) and Zaheer Khan (11).
Spinner Brad Hogg picked up the other two wickets, including Sourav Ganguly for 46, as Australia dominated on day two at the MCG.
Watch action from day three live on Sky Sports 1 from 11.30pm on Friday.