Australia snapped up two wickets in the final session Friday to leave India with work to do in the third Test as they chase the hosts' 338 following Steve Smith's first century in more than a year.

Pace spearheads Josh Hazlewood and Pat Cummins got the breakthroughs, dismissing openers Rohit Sharma (26) and Shubman Gill (50) as India reached stumps at 96 for two, 242 runs adrift.

The dogged Cheteshwar Pujara was not out nine and captain Ajinkya Rahane, who scored a century in the second Test in Melbourne, on five.

Australia resumed their first innings at the Sydney Cricket Ground on 166 for two, but only managed another 172 in the face of India's spirited fightback led by spinner Ravindra Jadeja who took 4-62.

Smith, though, was the star attraction, smacking 131 -- his 27th century, and his first since the 2019 Ashes in England -- before being the last man to fall. Marnus Labuschagne made 91 and Will Pucovski 62 on debut.

"I think it's a decent total (338), although it would have been nice to score a few more. You always want more," said Smith.

"It's a bit up and down the wicket," he added. 

"I think the boys bowled pretty well this evening and if we continue to bowl really disciplined tomorrow, we will get some opportunities."

India's openers negotiated a tricky nine overs before tea to be 26 without loss, and they put on another 44 before Hazlewood struck, removing Sharma.

The veteran right-hander hadn't played since straining a hamstring in October and only joined the team last week after a fortnight in quarantine.

But he quickly shook off the rust, hitting a big six off Nathan Lyon before surviving a scare on 24, when he was given out before the decision was reversed on review.

The reprieve proved short-lived, however, as Sharma scored just two more before being caught and bowled.

At the other end Gill, who made his debut in Melbourne, scoring 45 and 35 not out, again showed his composure and skill, reinforcing his status as a potential long-term opener.

Just 21, he brought up a maiden Test half-century before nicking an edge to Cameron Green off Cummins.

It left Pujara and Rahane to dig in and see India safely to stumps as the runs dried up.

Jadeja said the key to India's taking eight wickets Friday was patience.

"We just tried to put the balls in the right area, make them play dot balls," he said. 

"The plan was pretty simple -- bowl in the right areas and not give them easy boundaries so we could create pressure and get the wicket."   

- Jadeja direct hit -
Smith, who averages more than 61, failed to reach double figures in the first two Tests but roared back to life on his home ground, reaching his ton off 201 balls.

He looked comfortable throughout, surviving an ambitious lbw review on 41 before bringing up a patient century then letting rip, adding a quickfire 31 before being run out by Jadeja's fabulous direct hit.

Smith had resumed on 31 and Labuschagne 67.

It was a typically gritty innings from Labuschagne on a ground where he scored 215 this time last year against New Zealand.

But as he closed in on a fifth Test century, he was bamboozled by a Jadeja ball that took extra bounce, thick-edging it to Rahane at slip.

Smith brought up his half-century before light rain set in.

On their return from 24 minutes off the field, following an earlier eight-minute break, Matthew Wade was undone by his natural aggression, recklessly skying a Jadeja ball to Bumrah.

Green went without scoring, trapped lbw by Bumrah who then clattered the stumps of Tim Paine (1).

Cummins was then bowled by Jadeja as Smith began running out of partners.

He found an ally briefly in Mitchell Starc to ensure he made his century, before the tailenders were mopped up.

Scoreboard

Scoreboard at the close of day two in the third Test between Australia and India at the Sydney Cricket Ground on Friday:

India first innings

R. Sharma c&b Hazlewood              26

S. Gill c Green b Cummins            50

C. Pujara not out                     9

A. Rahane not out                     5 

Extras (w5, nb1)                      6

Total (two wickets, 45 overs)        96    

To bat: Hanuma Vihari, Rishabh Pant, Ravindra Jadeja, Ravi Ashwin, Jasprit Bumrah, Mohammad Siraj, Navdeep Saini

Fall of wickets: 1-70 (Sharma), 2-85 (Gill)

Bowling: Starc 7-4-19-0, Hazlewood 10-5-23-1, Cummins 12-6-19-1, Lyon 16-7-35-0

Australia first innings (overnight 166 for two)

D. Warner c Pujara b Siraj            5 

W. Pucovski lbw b Saini              62

M. Labuschagne c Rahane b Jadeja     91

S. Smith run out                    131

M. Wade c Bumrah b Jadeja            13

C. Green lbw b Bumrah                 0 

T. Paine b Bumrah                     1

P. Cummins b Jadeja                   0

M. Starc c Gill b Saini              24

N. Lyon lbw b Jadeja                  0

J. Hazlewood not out                  1      

Extras (b4, w1, nb5)                 10

Total (10 wickets, 105.4 overs)     338

Fall of wickets: 1-6 (Warner), 2-106 (Pucovski), 3-206 (Labuschagne), 4-232 (Wade), 5-249 (Green), 6-255 (Paine), 7-278 (Cummins), 8-310 (Starc), 9-315 (Lyon), 10-338 (Smith) 

Bowling: Bumrah 25.4-7-66-2, Siraj 25-4-67-1, Ashwin 24-1-74-0, Saini 13-0-65-2, Jadeja 18-3-62-4

Toss: Australia

Umpires: Rod Tucker (AUS), Bruce Oxenford (AUS)

TV umpire: Paul Reiffel (AUS) 

Match referee: David Boon (AUS)