In what was their last game before the showpiece event in United Kingdom, the Indian innings folded for 237, exactly in 50 overs while chasing a 273-run target. Australia had put on board 272 for nine, built around Usman Khawaja's (100) second hundred of the series.
It was India's first ODI series defeat at home since losing to South Africa in 2015 as their big guns fell silent on the day when the series was on line.
India also became the only side in the world to lose an ODI series twice after leading 2-0.
History too was against India since the hosts have not successfully chased a 250-plus total at the Kotla in the last 37 years. It was way back in September 1982 against Sri Lanka when they overhauled a 278-run target.
On the other hand, Australia, who were trailing 0-2 initially, made a remarkable comeback to grab their first ODI series win in India since 2009.
It is only the fifth instance that a team has won a series after being down 0-2.
Only Rohit Sharma (56) could score a half-century, which included two reprieves.
India could not make a flying start, losing last match's centurion Shikhar Dhawan (12) early and managed just 43 runs in the 10 Powerplay overs.
Rohit was again slow off the blocks, hardly rotating the strike but found some elegant boundaries off the pacers.
The assuring presence of skipper Virat Kohli (20) did not last long as he too departed early, caught behind while attempting a cut off Marcus Stoinis. He added 53 runs for the second wicket with Rohit.
India threw Pant (16) in the line of fire by promoting him to number four but the local boy, who desperately required a substantial performance to back his claim for a spot in the World Cup squad, lasted only 16 balls.
He smashed leg-spinner Zampa for a six but was undone by Lyon, who had the left-hander caught at first slip.
Rotating the strike was key on this Kotla wicket but the Australian spinners kept the pressure on India with dot balls.
Reduced to 132 for six inside 30 overs, India were out of the contest and Kedar Jadhav (44) and Bhuvneshwar Kumar (46) just reduced the defeat margin. Their 91-run stand off 103 balls, however, showed that there were no demons in the wicket.
Earlier, opener Usman Khawaja, who had not scored a century before arriving to India for this series, hit an exact 100 off 106 balls as he shared two big partnerships at the top of the order to set platform for the visiting side.
Australia were placed comfortably at 175 for one and set for a kill in slog overs, but India came back when Bhuneshwar got rid off Khawaja in the last ball of the 33rd over.
The visitors added only 97 runs in last 17 overs for the loss of seven wickets.
The left-handed Khawaja first raised a 76-run stand with Aaron Finch (27) after his skipper elected to bat in hazy and overcast conditions and followed it up with a 99-run partnership with Peter Handscomb (52).
Khawaja was yet again impressive with his footwork, handling the Indian spinners nicely before being caught at shot extra cover by Kohli off Bhuvneshwar. The left-hander hit 10 fours and two sixes before driving straight to Kohli.
Jadeja then got rid of Glenn Maxwell (1) and Shami sent back Handscomb as Australia lost three wickets in the space of 14 balls.
Jasprit Bumrah was exceptional in his first eight overs giving just 14 runs but Jhye Richradson (29) spoilt his figures by creaming off four boundaries from his ninth over, providing one last push to Australian innings.
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