Watson, playing in his comeback match for Australia after an injury-marred season, took over the captaincy after Clarke pulled out with a back injury.
Clint McKay replaced fellow paceman Ryan Harris in the other change to the Australia team from Friday's three-wicket loss to Sri Lanka in Hobart.
India, seeking a win to keep their tri-series finals' hopes alive, made a couple of changes with Virender Sehwag returning to open the innings.
Praveen Kumar replaced injured Vinay Kumar and skipper M.S. Dhoni came in for Parthiv Patel after serving his one-game suspension for slow over rates. Paceman Zaheer Khan stayed out of the side with injury.
Sri Lanka lead the tri-series on 15 points, one ahead of Australia, with India four points adrift.
Teams:
Australia: David Warner, Shane Watson (capt), Peter Forrest, Mike Hussey, David Hussey, Matthew Wade, Daniel Christian, Clint McKay, Brett Lee, Xavier Doherty, Ben Hilfenhaus.
India: Virender Sehwag, Sachin Tendulkar, Gautam Gambhir, Virat Kohli, Suresh Raina, M.S. Dhoni (capt), Ravindra Jadeja, Ravi Ashwin, Irfan Pathan, Praveen Kumar, Umesh Yadav.
Umpires: Billy Bowden (NZL) and Simon Taufel (AUS).
TV umpire: Simon Fry.
Match referee: Chris Broad.