Captain Ricky Ponting and Andrew Symonds hit 58 runs each to help the world champions recover from a disastrous 4-2 to post 240-9 after being sent to bat in the day-night semifinal.

New Zealand were bowled out for 206 in reply after 36-year-old Glenn McGrath dispelled doubts over his future in the game with a superb 3-22 in an unbroken opening spell of 10 overs.

The Black Caps were in danger of falling short of their lowest one-day total of 64 against Pakistan in Sharjah in 1986 when they slipped to 35-6 by the 15th over.

But Daniel Vettori (79) and Jacob Oram (43) gave the Aussies a fright by adding 103 for the seventh wicket as the late evening dew made it difficult for bowlers to grip the ball.

Symonds broke the threatening stand by having Oram stumped in the 36th over before and Vettori was bowled by Mitchell Johnson in the 43rd.

New Zealand added 171 runs for the last four wickets amid full-throated support from some 20,000 Indian fans, but the effort was not enough to secure victory.

It was Australia's 16th win over their trans-Tasman rivals in the last 18 meetings, sending them to Sunday's final in Mumbai against the winner of Thursday's other semi-final between South Africa and the West Indies in Jaipur.

Australia had not made the final in the four previous editions of the biennial tournament despite winning the last two World Cups in 1999 and 2003.

Ponting's men were stunned by hostile Kyle Mills before they pulled themselves out of a deep hole at the Punjab Cricket Association ground.

Mills, the 27-year-old from Auckland, finished with 4-38, but the New Zealand batsmen undid his good work in the second session.

McGrath had Lou Vincent caught at second slip by Ponting for one and Brett Lee bowled Nathan Astle for zero as the Black Caps slipped to 20-2 by the seventh over.

Two more wickets fell in eight balls at the score of 30 to diminish New Zealand's chances of causing an upset.

McGrath forced Hamish Marshall to edge a catch to wicket-keeper Adam Gilchrist, before New Zealand captain Stephen Fleming fell in Nathan Bracken's first over.

Fleming, his team's main hope in the absence of the injured Scott Styris, made 15 off 28 balls when he hung his bat out to Bracken and was snapped up by Ponting in the slips.

McGrath then bowled Peter Fulton for two and had Brendon McCullum caught by Damien Martyn to leave New Zealand struggling at 35-6.

Earlier, Mills struck twice in the third over of the match when he had Shane Watson caught at mid-off with the second ball and Gilchrist was snapped up at square-leg off the fifth.

Martyn (26) helped Ponting add 66 for the third wicket when he fell to a marginal leg-before decision off Vettori in the 20th over.

Ponting moved to his 55th one-day 50 in the 27th over, but was dismissed two overs later when he holed out to mid-on against Mills.

Michael Hussey put on 65 for the fifth wicket with Symonds, whose run-a-ball knock boosted Australia's lower order before he was bowled by a Shane Bond full toss.

Bond, showing no signs of the hamstring niggle that hampered him earlier in the tournament, also bowled Brett Lee and ran out Mitchell Johnson with a smart throw on his follow-through.