Chasing a modest target of 253, Australia lost their last eight wickets for 112 runs with seven of their batsmen failing to get to double digits to be bundled out for 202 in 43.1 overs.
"Well, it's happening a bit too often for my liking to be honest with you -- in all forms of cricket. We have had a lot of collapses and we need to stop it," a dejected Smith said at the post-match press conference.
"It's a hard to put my finger on but whatever it is. It needs to change and we need to make better decision when we are under pressure and start playing properly. It's not good enough," the skipper said.
Smith said they must try to execute their plans in their bid to hopes alive during the five-match series.
"The guys have trained and trained really well. It's now about getting in the middle and executing those when you are under pressure. This game we just couldn't get the partnerships, we are just making silly errors. You are not allowed to do so against a quality line-up like India."
"It's just easy to just sit here and say it needs to stay but when you get out in the middle, you've to change what you're doing because it's not working."
Asked whether they're panicking, he said: "Not panicking as such. I thought we panicked during last game a little bit. Maybe the guys are trying to watch the ball too closely and forgetting about just playing the game."
Marcus Stoinis waged a lone battle with a 62 not out while Smith, in his 100th ODI, failed to convert his impressive 59 after with substitute Ravindra Jadeja taking a superb forward diving catch in the deep.
Australia have now lost their last 10 ODIs away from home.
They would hope that Aaron Finch (calf muscle injury) is match-fit for Indore as Hilton Cartwright has been a big letdown at the top with scores of 0-1-1 in three matches in India.
Wicketkeeper batsman Matthew Wade, who opened the gates for Kuldeep Yadav en route to a historic hattrick last night, is also struggling with 11 runs from two ODIs as Peter Handscomb may be drafted in for Indore.
On the conditions, he said the ball spun a little more as the game went on but the pace of the wicket remained the same throughout.
"Perhaps their spinners bowled a little bit slower - Chahal and Kuldeep bowled reasonably slow and tried to get whatever they could out of the surface. They got quite a few balls to spin sharply."
Smith however said the conditions could not be an excuse as both the teams had the same on offer.
Execution has not been from the top drawer and that certainly is hurting his team's chances, admitted Smith.
"We are just not executing our skills when we are out there in the middle and we need to start doing that. Against a quality team like India, if we are not scoring the runs we need to, we're not going to win many games of cricket."
Smith also praised Bhuvneshwar Kumar and Jasprit Bumrah for creating pressure up front.
Kuldeep Yadav once again troubled the Aussies to return with a hattrick but the skipper said they played the chinaman reasonably well at times.
"In the last few overs actually, our tail-enders probably couldn't play him as well as the batters. Actually, I felt quite comfortable against him today. We weren't able to go on and close the game out.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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