Riding on Iyer's dazzling 202 and a 74 off 68 balls by Krishnappa Gowtham, who smashed four sixes and 10 fours, the home made 403 in reply reply to Australia's 469 for 7 declared, forty minutes after lunch at the Brabourne Stadium.
Holding a lead of 66, Australia advanced to 59 for two in the second innings at tea, after losing opener Matt Renshaw (10), his second failure in the match, and Glenn Maxwell (1), promoted in the order.
Iyer, who came to the crease yesterday in the 12th over with the score reading 19, remained unconquered after a stay of six minutes over six hours and caught the eye with his assured stroke-play, both off spin as well as against pace.
He also bettered his 200 made in October 2015 in the Ranji game against Punjab at the nearby Wankhede Stadium.
Just as he had done in the morning when racing from overnight 85 to 100 with a flurry of fours off speedster Jackson Bird, Iyer galloped from 184 to 202 with the help of four fours in one over from left arm spinner Stephen O'Keefe before the India 'A' innings came to an end.
The home team lost two wickets before Gowtham, who was unable to bowl in the Australia innings due to a hamstring injury, hammered off spinner Nathan Lyon for four sixes on way to reach his half century off just 43 balls.
Iyer, 15 short of the landmark last evening in a team score of 176 for 4, took just 10 minutes to reach the landmark with a flurry of four fours, including three in one over from Bird.
The hundred came up in 157 minutes and 103 balls and contained five sixes and 11 fours.
While Iyer continued to bat in forthright manner without any difficulties, the other overnight not out batsman Pant - with whom he added 55 runs for the fifth wicket - struck three fours and then gave a tame return catch when lured out by O'Keefe in his first over of the day.
Next batsman, wicketkeeper Ishan Kishan, did not last long as he edged Mitchell Marsh's fifth ball of the morning to 'keeper Matthew Wade with the score on 234.
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