Waugh, who is the brand ambassador for his country's Qantas Airlines and was in Mumbai in connection with the launch of its flights to India, also blamed the slide in India's fortunes to the break the team had after returning triumphant from Pakistan in April.
"They (India) have not played enough cricket after the break. They will be all fired up for the series against Australia. It's just a question of elevating themselves, which they do against tough competition. Australians rate India very highly," said Waugh.
"It will be a tough series," the New South Welshman added.
Waugh, who is concentrating on writing a book after his retirement at the beginning of this year, also spoke out against excessive use of technology in the game with reference to the experiment to be conducted during the September 10-25 ICC Champions Trophy.
"Cricket will lose something (with the use of more and more technology). You don't want it to be too Americanised with more and more time outs. You don't want so many stoppages which would affect the flow and momentum. I agree with (Ricky) Ponting and (Tatendu) Taibu," he said.
Waugh's successor Ponting and young Zimbabwe skipper Taibu are the only captains who have spoken out against use of technology by which the field umpires would be wired to the stumps to hear faint snicks and the third umpire would call no-balls by watching TV replays during the Champions Trophy.
Asked what was the secret behind Australia's string of successes in the finals, 12 in a row including the last two World Cups, Waugh attributed it to hard work and ability to handle pressure.
"Everyone (in the team) knows how to handle pressure. They look forward to the finals. They work hard and handle pressure well. After a few finals you know how to handle it. It boils down to confidence and hard work," he explained.
Waugh also remembered the Test match the Australian team had won under his captaincy in Mumbai before going on to lose the series 1-2 in 2001 and departing without conquering what he had often described as 'the final frontier'.
"That series in 2001 was perhaps the best ever I have played in. The Mumbai Test was nerve-wracking for me as captain when Sachin Tendulkar came in to bat as the noise level at the Wankhede Stadium was deafening.
"I remember the centuries by (Matthew) Hayden and (Adam) Gilchrist. I also can't forget the lucky manner in which we got Sachin's wicket when his pull shot rebounded off Justin Langer's shoulder for Ricky Ponting to bring off a great catch," Waugh reminisced.
"I also have great memories of my first visit in 1986 and in 1987 when we won the World Cup (for the first time)," the Australian great added.