Lyon was helped along by some poor shot selection by the Indian batsmen, sending back Cheteshwar Pujara, Virat Kohli and Ajinkya Rahane for figures of 3/40.
Fast bowler Mitchell Starc and left-arm spinner Steve O’Keefe bagged a wicket each.
Lokesh Rahul was the only batsman in the Indian top order to keep the Australian bowlers at bay to post a well made 79 by tea. His unbeaten 175-ball innings includes nine hits to the ropes.
Ravichandran Ashwin was giving him company at the other end when the teams went in for tea.
India (First Innings): 168/5 (Lokesh Rahul 79 batting; Nathan Lyon 3/40) vs Australia.