The visitors are 220 runs behind India's first innings total of 469, with Mitchell Johnson keeping Watson company.
Watson added 73 runs for the eighth wicket with Brett Lee to lead a recovery from 167 for seven at lunch.
Lee, having a poor series with the ball, made 35 until off spinner Harbhajan Singh broke through to have him caught at slip close to tea.
Watson survived a close leg before appeal against paceman Ishant Sharma on 39 but played fluently, hitting eight fours and a six in his four-hour stay. Watson smashed debutant leg spinner Mishra, who took three wickets, over midwicket for six. He pulled Sharma to midwicket to reach fifty and with Lee saw off the threat of the second new ball.
Mishra returned three for 70 and Sharma two for 68.
Australia lost Mike Hussey (54), who hit his 10th test fifty, Brad Haddin (9) and Cameron White (5) on the third morning.
Openers Matthew Hayden (0), skipper Ricky Ponting (5), Simon Katich (33) and Michael Clarke (23) fell early to bring the world number one team under pressure on day two.
Saurav Ganguly top-scored with 102 for his 16th test century in his farewell series and raised partnerships of 142 and 109 with Sachin Tendulkar (88) and stand-in skipper Mahendra Singh Dhoni (92) to guide India to a solid first innings total.
The first match of the four-test series ended in a draw.
'Let your hands talk in the ring. I am excited … let’s make history., said the Ukrainian Usyk after the official weight-in where the Briton avoided eye-contact with his opponent
The first batch of students will be admitted in August or September
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One expat never wanted to live in a ground-floor apartment again after seeing how floods destroyed her home; another vowed to avoid units on higher levels after having to climb 12 floors down
This initiative that aligns with the nation's continuation of 'Year of Sustainability', was supported by the parents of the kindergarteners
The American sits five shots off the lead with Dubai-based Thomas Detry and Thorbjorn Oleson staying in contention on a record-setting day