Kevin Pietersen top-scored with 77 off 82 balls, a knock studded with six boundaries and two sixes, but no other batsmen reached 50 on the easy-paced wicket at the Nehru stadium on Thursday.
England, who lost the first three games, must win in front of 75,000 fans to stay afloat in the seven-match series after three defeats.
The tourists were done in by reckless shots from the top order. Geraint Jones partially retrieved the situation before being last out for 49.
Yuvraj Singh claimed two wickets and grabbed two good catches to compound England's misery in oppressive hot and humid weather.
England had lost both openers, Strauss and Matt Prior, by the sixth over with the total at 27.
Left-handed Strauss was trapped leg-before by Irfan Pathan for seven and Prior edged local boy Shanthakumaran Sreesanth to wicket-keeper Mahendra Dhoni after making 14.
Pietersen and Paul Collingwood repaired the early damage by adding 90 for the third wicket before a brilliant return catch by Yuvraj ended the partnership.
Yuvraj dived to his left on his follow through to hold a one-handed catch as Collingwood, who made 36, mistimed a drive.
The total had moved to a respectable 153-3 by the 29th over when England lost both Pietersen and captain Andrew Flintoff in the space of eight deliveries.
Pietersen top-edged a sweep off Harbhajan Singh and Yuvraj made no mistake with the skier at mid-wicket.
Flintoff, who made 12, on-drove Yuvraj uppishly to short mid-wicket where captain Rahul Dravid latched on to a low catch.
England soon slumped to 172 for six as Vikram Solanki failed to read Ramesh Powar's off-spin and was bowled for 12.
Virender Sehwag chipped in with the wickets of Ian Blackwell and Gareth Batty in successive overs to reduce England to 203-8.
The tourists made three changes from the last game in Goa, bringing in Pietersen for Owais Shah and Matthew Hoggard and Batty in place of Liam Plunkett and Sajid Mahmood.
India made one change, replacing paceman Munaf Patel with Sreesanth.