Out-of-sorts captain Aaron Finch again failed to fire as Australia set India a target of 231 to win the third and final ODI at the MCG.
Rain delayed the start and forced players off the field for about half an hour after only two balls had been bowled.
When play resumed, it was the visitors who got on top – much to the delight of their army of fans.
Leg-spinner Yuzvendra Chahal made the most of his call-up by producing a career-best haul of 6-42 (10 overs).
He destroyed the home side, which was all out for 230 in the 49thover, after Bhuvneshwar Kumar (2-28, eight overs) had taken care of openers Finch and Alex Carey.
During the build-up to the series decider, Finch had announced his intention to take an aggressive approach in his bid to break out of a form slump.
But he stuttered his way to 14 after a rain-interrupted start and was out LBW, taking his series total to 26 runs at 8.67.
Finch faced most of his 24 balls from a position well outside his crease and there was controversy when Kumar responded in bizarre fashion.
The right-arm quick released one delivery from way back behind the bowling crease, next to the umpire, who called the ball dead after Finch had backed away.
The incident led to a heated discussion between opposing players in the middle.
Kumar had the last laugh, trapping Finch with the next ball.
It was the third time in the series Kumar had got his man, having bowled Finch in each of the first two matches.
Alex Carey (five) had been the first man out as Australia limped to 2-30 from the first 10 overs.
Shaun Marsh (39) and Usman Khawaja (34) looked to have settled Australia in the middle overs but were both removed by Chahal in the space of four balls.
Glenn Maxwell again came in at No.7 but had plenty of time to make an impact, arriving in the middle with more than 20 overs left to bat.
He blasted five boundaries in a knock of 26 from 19 but was out to a brilliant diving catch from Kumar in the deep.
Peter Handscomb (58) was the only Australian batsman to post a half-century.