Coming into the game after a 1-1 draw in the first of the three match series, India went into the lead in the 23rd minute through a Devender Walmiki strike.
But Australia struck back-to-back goals in the last quarter through Jacob Whetton (47th) and Aran Zalewski (48th) to claim a well deserved victory.
The Indian defenders and midfielders played good hockey to match the visitors' for most part of the game.
India though took the lead against the run of play in the second quarter when a counter-attack saw Amir Khan make a run down the left before picking out Walmiki inside the penalty circle. Walmiki made no mistake with a one-touch finish.
But India faced trouble in the fourth and final quarter with Australia scoring twice in two minutes.
The frustration of the Indian players came to the fore when Manpreet Singh was shown a yellow card and handed a five minute penalty for a rough tackle.
The Korean strikers gave the Indian defence a torrid time as they forced two successive penalty corners in the 35th minute. Within the next five minutes, strikers Hwang Tae-il and Kim Hyeong-jin darted into the Indian circle from the flanks and took shots at the citadel that were blocked by goalkeeper Sreejesh.
India earned their second and last penalty corner in the 45th minute, but Rupinder's rising drag-flick this time went wide to the right.
India had a good chance of going ahead in the 48th minute when Chinglensana Singh lunged forward to deflect a cross from Surender Kumar on the right flank. The ball, however, went straight into the pads of the Korean goalkeeper.
Meanwhile, in another match, China got the better of Japan 2-1.
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