Nalini, looking for her first title of the season, shot a fine two-under 70, and that was matched by Smriti.
Nalini leads the field with a total of 143 and Smriti is breathing down her neck at 144. Neha Tripathi (73) and Vani Kapoor (73), winner last week, were way behind at 149 and 150.
The 23-year-old Delhi golfer, Nalini, had three birdies and just one bogey, while Smriti had four birdies and two bogeys.
Nalini had five pars before finding her first birdie on the sixth. She dropped her only shot of the day at eighth, and then added further birdies on 10th and 13th and ended at 70.
Smriti, an aggressive player, birdied the first to catch Nalini, but again fell behind dropping a bogey on fourth.
Nalini birdied the sixth to go two ahead but bogeyed the seventh and the lead was back to one. Both birdied the tenth and then Smriti pulled one with a birdie on 12th. Nalini nosed ahead again with a birdie on 13th. Smriti bogeyed the 14th and birdied the 16th to stay one behind.
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Saaniya Sharma, who shot a creditable round at even par 72 following her 79 on first day, moved to fifth place at 151. She was followed by Shraddhanjali Singh (79), who slipped after a 75 on first day.
Neha had one birdie against two bogeys, while Vani had two birdies and three bogeys including back-to-back bogeys on eighth and ninth. Saaniya had the most birdies on the day with four, but she also had four bogeys in her 72.