"Smith's batting has been outstanding for a long time but his captaincy is challenged now. He needs to define the way for his team to have success," Clarke said.
Having drawn the two-Test series in Bangladesh, Smith's captaincy is likely to be tested to the limit with Australia trailing 0-1 in the five-ODI series against India.
Australia had the series opener in Chennai firmly in control with India reeling at 87 for five before MS Dhoni and Hardik Pandya turned it around with a century partnership en route to a 26-run win via D/L method.
Clarke was here to present Don Bradman's bat, that the legend used in India's first tour of Australia in 1948, to the Fanattic Sports Museum.
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Talking about the Indian team, the cricketer-turned- commentator praised chinaman bowler Kuldeep Yadav.
"He is an attacking bowler. His control as a wrist spinner from the back of his hand is amazing and is his strength. He has got all the skills, spins both ways, bowls long spells. He did well in the Test series."
Clarke further said David Warner will be back amongst the run after missing out in Chennai.
"He got centuries in Bangladesh... It is hard to overlook him by seeing his performance in one game.
"He will find ways to score, he always does. He will have lot of impact in the series. He and Smith will be the leading scorers for Australia in the series. Hopefully, they start scoring from Kolkata.