Ponting, a two-time World Cup winning captain, said: "India have got too many class players in their team to not be serious contenders at some stage. If they happen to play as well as they can, they are very dangerous."
India kicked off their title defence in grand style, beating arch rivals Pakistan by 76 runs in their tournament opener at the Adelaide Oval on Sunday.
"India got into the World Cup after a tough time in the Test series and the tri-series. But I got a feeling that they got a bit of a downtime after that and started to build things up at the start of this tournament," said Ponting.
The 40-year-old, who had been part of three World Cup winning sides, thought India needed to improve their bowling.
"Bowling is a concern; it always is. When any Indian team goes to play in Australia or similar conditions, it is always the bowling that is the weak point. Their batting, however, is outstanding. We all know that."
"I think Australia are favourites. It is a tag that will sit well with them. Most World Cups I have been part of, we were favourites. But you don't think about it. You just go out there, try and prepare as well as you can and go and play.
"Just because you're the favourites going into the game, doesn't change anything. But this team has been very impressive in their first game against England and the balance they have in the squad right now is probably as good as I have seen for a while," Ponting was quoted as saying by 'BCCI.TV'.
With matches being played at some of the biggest and smallest grounds across Australia and New Zealand, Ponting felt that teams will find it a challenge to alter their batting, bowling and field placing strategies to suit the contrasting sizes of the outfields.
"It will be a huge contrast and that's why I think New Zealand will be really hard to beat. They've got an incredible record at home in One-day International cricket.
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