Atwal (73-71-70) is now three-under and tied-8th, while another Indian Gaganjeet Bhullar (69) moved up to tied-10th after 54 holes, although it was a tough day for scoring and only three players including Bhullar broke 70.
Atwal, who suffered a bogeyman eight on the first day, had four birdies in a row from fourth to seventh during his 70 today. Though he had two more birdies on back nine, he gave away four bogeys also.
Rashid Khan (75) was tied-30th while Khalin Joshi (77) was tied-40th.
Juvic Pagunsan of the Philippines charged into a one-shot lead after shooting a two-under-par 70 in the third round.
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Pagunsan totalled eight-under-par 208 to hold a narrow edge over Malaysia's Gavin Green at the Taiwan Golf and Country Club.
Green stayed in the hunt for his first Asian Tour title after shooting a 71. Keith Horne of South Africa was a further two shots back following a 72.