Australia grabbed the early advantage with a lead of 47 on Wednesday after Matthew Kuhnemann's five-wicket haul helped dismiss India for 109 on a dramatic first day of the third Test.

The tourists were 156-4 at stumps after Usman Khawaja hit a gritty 60 to drive his team's reply on a viciously turning pitch in Indore.

Peter Handscomb, on seven, and Cameron Green, on six, were batting at close of play. Spinner Ravindra Jadeja took all four Australian wickets.

Khawaja stood out with his 21st Test half-century and a 96-run second-wicket stand with Marnus Labuschagne, who made 31.

Labuschagne, who tops the Test batsman rankings, won a reprieve on nought when Jadeja was adjudged to have overstepped the crease.

The left-handed Khawaja fell with an attempted sweep, caught at deep mid-wicket after putting Australia ahead of India's first-innings total.

Stand-in skipper Steve Smith looked good in his knock of 26 before being caught behind.

But it was Kuhnemann, a left-arm spinner, who made Australia's day after the hosts elected to bat first on a dry pitch, which turned from the start.

Kuhnemann returned his maiden five-wicket haul in just his second Test and bowled out India soon after lunch with the help of senior spinner Nathan Lyon, who took three.

Australia, attempting to fight back after two bruising defeats in the four-match series, introduced spin in the sixth over.

It brought instant reward in a frenetic opening session on a spinning minefield with a low bounce, as Kuhnemann had captain Rohit Sharma stumped for 12.

Shubman Gill, recalled in place of the struggling KL Rahul, began to hit back with three fours but also fell to Kuhnemann, caught at slip by Smith for 21.

Lyon then bowled Cheteshwar Pujara for one with a delivery that spun hugely and stayed low.

Wickets kept tumbling as India slipped to 45-5 in the first hour of play.

Virat Kohli looked positive in his knock of 22, but fell lbw to Todd Murphy, the third time the off-spinner has claimed the star batsman's wicket in as many matches.

From the first ball of the day, returning left-arm fast bowler Mitchell Starc thought he had Rohit caught behind but the appeal was turned down.

Australia did not review, only for replays to show the batsman had nicked the ball. Three balls later they missed another opportunity that would have seen Rohit out lbw had it been referred to the TV umpire.

But Rohit, who hit a century in the first Test, did not last long and neither did the rest of the Indian batting.