Big and burly Watson struck 13 fours and three sixes in making 102 off 94 balls while the in-form Bailey was equally impressive in scoring a career-best 156, his second ODI ton, in 115 balls. His brilliant innings contained half a dozen sixes and 13 fours.
These two batsmen also compiled the second-highest third wicket stand of 168 in ODIs against India to help the visitors record their fourth 300-plus total in the series in which the sixth ODI at Cuttack was totally washed out.
The duo simply tore apart the clueless Indian bowling attack that fielded three frontline spinners for the first time in the seven-match series after the hosts decided to go in with Amit Mishra to partner R Ashwin and Ravindra Jadeja.
Later, after the dismissal of Watson and Glen Maxwell (9), Adam Voges (44 not out) helped his captain add another 120 runs in only 80 balls for the fifth wicket to complete India's misery on a good batting track.
India had the visitors under check in the first 20 overs by restricting Australia to 83/2 but the middle overs were totally dominated by Watson and Bailey who compiled the second-best-ever third wicket stand for their country against the hosts.
The 168-run partnership, that came off just 142 balls, was only the second-highest after Ricky Ponting and Damien Martyn's unfinished 234 in the 2003 World Cup final at Johannesburg and the eighth 150-plus stand for all wickets against India.