Australia have relied on some luck to dismantle India's batting order on day two of the Delhi Test, with a remarkable catch from Peter Handscomb seeing the tourists claim their fourth wicket for the day.

In what was also Nathan Lyon's fourth wicket for the innings, the Aussies' somewhat frustrating first session of the day was aided by some Handscomb mastery in the field.

Two balls into the 26th over of India's innings, a Shreyas Iyer leg-side shot off a Lyon delivery was struck straight towards Handscomb at short leg, with the ball hitting the Victorian's arm, body and knee before being taken just above the ground with a diving effort.

The juggling left both fielders and batsmen in shock, with India losing another wicket in the opening session.

"Oh has he taken it? This is a brilliant, brilliant catch," commentator Harsha Bhogle said on the Fox Cricket broadcast.

"It'll go down in the scoresheet as a bowler's wicket, but this almost completely short leg's catch.

"There's a touch of disbelief on Shreyas Iyer's face as he walks back."

The wicket came one over after Australia lost their third and final review for the innings, with captain Pat Cummins now unable to challenge the umpire's decision for the remainder of India's spell at the crease.

India are now placed at 4/66 and trail Australia by 197 runs.