Sharma, a winner on the PGTI Indian Tour, carded five-under 67 at the par-71 at the Kurmitola Golf Club.
Sharma is two behind co-leaders, Japan's Shunya Takeyasu and Soomin Lee of Korea, who shot matching seven-under-par 64s.
The next best Indian was experienced and five-time winner on Asian Tour, Gaganjeet Bhullar (67), who at tied 7th, showed a welcome return to form after missing the cut last two weeks in Singapore and Myanmar.
Rahil Gangjee, who played three rounds with fever in Myanmar, was tied-23rd at 69.
Shankar Das and Khalin Joshi carded 70 and were tied 38th, while Ashok Kumar (71) was tied 57th with Sujjan Singh and Abhinav Lohan.
Abhijit Chadha (72) and Honey Baisoya (72) were tied 76th, Amardip Malik (74) was Tied-97th and Udayan Mane (75) was further down in tied 104th.
Bhullar shot bogey free four-under 67 and said,"It was quite a consistent round for me today. I made 14 pars and four birdies. I didn't do anything exciting to be honest. I just managed to keep the ball in play. I hit the ball really good and I gave myself a lot of birdie opportunities out there. It was a decent round."
Takeyasu, who won his maiden Asian Development Tour (ADT) victory in Malaysia last week, returned with a bogey-free round highlighted by seven birdies while Lee, who came off the back of a top-10 finish in Myanmar, was equally impressive.
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