Wellington: It was another mid order collapse for India as they lost three important wickets in the post-lunch session. India went into tea at 190-5 with approximately 34 overs of play remaining in the day.
'Wall' Dravid (31) and captain Dhoni (6) were left with all to do for the visitors.
Jesse Ryder trapped Yuvraj Singh plumb in front of the wicket to reduce India to 182/5.
Yuvraj hit 2 fours in his 9-run knock before Ryder got the Kiwis the fifth breakthrough.
Shortly before that, Tim Southee dismissed VVS Laxman for 4 to put India at 173/4.
Southee took his first wicket when Laxman reached out to a wide delivery and edged to second slip where Tim McIntosh dived to his left to take the catch.
Earlier, Chris Martin dismissed Sachin Tendulkar to reduce India to 165/3.
The dismissal came when Tendulkar went to the back foot to play a square drive away from his body with hardly any foot movement but the extra bounce had him edging the delivery to keeper Brendon McCullum for the catch. Tendulkar hit 11 fours in his 62-run knock and added 90 runs with Rahul Dravid for the third wicket.
This was shortly after Tendulkar achieved his 53rd fifty with his 9th hit to the fence - a fantastic square drive off Iain O'Brien that he executed by lifting his front leg and shifting his entire weight on the back foot.
Tendulkar and Dravid steadied the Indian innings that was rocked by local lads O'Brien and James Franklin who dismissed Virender Sehwag and Gautam Gambhir respectively in successive overs to put India at 75/2 in the first session.
After beating New Zealand by 10 wickets in the first test at Hamilton and drawing the high-scoring second test at Napier, India can clinch the three-test series with a win or draw at the Basin Reserve.