A sparkling century from Gautam Gambhir could not save India from an 18-run defeat at the hands of Australia in their tri-series match here on Sunday.
A win would have secured India a berth in the finals, but they were always struggling at the crease after several Australian batsmen returned to form in posting 317 for seven.
India chased bravely and made 299 from 49.1 overs, the highest total ever by side batting second at the SCG, but it wasn't enough with Brett Lee taking 5-58 for the home side.
With Ricky Ponting making 124, Australia, choosing to bat first on a docile wicket, posted the highest score of the series and then made early inroads with the ball.
India were always struggling after star opener Sachin Tendulkar fell in the second over before they slumped to 51 for four.
Gambhir and captain Mahendra Singh Dhoni revived Indian hopes by putting on 98 for the fifth wicket, before the latter was caught behind off the bowling of Brett Lee for 36.
Robin Uthappa and Gambhir then kept the score ticking over by putting on 67, but India's hopes suffered a fatal blow when the centurion's brave knock came to an end when he was stumped by Adam Gilchrist, who completed six dismissals, off the bowling of Brad Hogg for 113.
It left India needing 102 more off just 65 balls and although Uthappa bravely kept the chase going with a dashing 51, the required run rate was just too high.
Despite the lack of top order support Gambhir, batting at number three, notched his second century of the series and fourth overall in fine style, playing some attractive, powerful and creative strokes square of the wicket.
He took 109 balls to reach his century, with nine fours.
Gambhir saved his best shot for after the milestone, lofting Hogg into the crowd over mid-wicket, but the spinner had his revenge in his next over.
Earlier, Australia's batsmen burst out of the doldrums, led by Ponting.
Sparked by a flying start from Gilchrist, Matthew Hayden and Ponting that saw them reach 100 in the 12th over, the home side capitalised on the first use of a batsman-friendly wicket.
Ponting finally put his tri-series woes behind him to score his 26th one-day international century.
The Australian captain, Hayden and Gilchrist were particularly savage on recalled fast bowler Shanth Sreesanth, whose first spell cost 37 runs from just four overs.
However, he did manage to take the wicket of Gilchrist who looked in ominous form but was brilliantly caught by a diving Dhoni for 16 off just seven balls.
Ponting picked up where Gilchrist left off, with a string of aggressive shots straight down the ground.
When Sreesanth was duly taken off, Ponting welcomed new bowler Irfan Pathan by pulling his first ball over mid-wicket for six.
He reached his century from just 111 balls, with six fours and the one six, before holing out from the bowling of Sreesanth in the quest for late runs.
The previously out-of-form Andrew Symonds welcomed the flat wicket to add some late innings fireworks with 59 from 49 balls, while Hayden rode his luck with a string of agricultural shots through the on-side, including a six over mid-wicket off Sharma, before being run out for 54.
All the Indian bowlers were punished, with Sreesanth conceding 58 from eight overs and Pahan 73 from nine.