After winning the toss and electing to bat on Friday, Australia lost the wicket of opener David Warner for a duck in the third Test at the MCG.
Chris Rogers (57) and Shane Watson (52) tallied up respective half-centuries in a solid partnership to help steady the innings before both batsmen departed following lunch as India threatened to take control of proceedings.
But Australia captain Smith showed maturity beyond his years throughout the opening day, finishing unbeaten with 72 runs from 158 deliveries, which included four boundaries and a six as the 25-year-old chalked up 1000 runs in a calendar year.
Under-fire wicket-keeper Brad Haddin (23 not out) will also return to the crease on day two after surviving a nervy final session.
Plenty of eyes were on Warner in the lead up to the first ball, with the explosive opener still struggling to overcome a thumb injury sustained in the second Test last week.
But Warner's stay in the middle lasted just two overs after the Australian saw his shot fly through to Shikhar Dhawan off Umesh Yadav, who closed the day with figures of 2-69 from 20 overs.
That dismissal brought Watson to the crease and it worked wonders as he teamed up with opener Rogers through to the first hour of the second session.
The pair worked well against the new ball seeing Australia to 92 for the loss of just one wicket.
Rogers and Watson added 23 runs after the lunch break before the former fell victim to Mohammed Shami (2-55), edging to MS Dhoni.
Watson followed Rogers back to the pavilion the very next over, trapped lbw by Ravichandran Ashwin.
Australia managed to avoid a collapse thanks to Smith and Shaun Marsh.
Marsh hit 32 off 83 balls before he was sent packing by Shami with the score 184-4.
Test debutant Joe Burns (13) made a brief appearance, dismissed by Yadav.
Haddin - under pressure having failed to make more than 22 runs in 13 previous innings - showed grit alongside Smith to see the Australians through to stumps on a see-sawing day.