Vettel, who is coming into the race with three wins in a row, picked up pace gradually and recorded his best lap in 1 minute 27.619 seconds in the dying moments of the one-and-a-half hour morning session.
Vettel outpaced McLaren's Jenson Button, who was just 0.310 second behind. Both of them recorded 22 laps each.
Ferrari's Fernando Alonso, who is locked in a tight battle for the championship with Vettel, was third with his best time of 1:28.044.
This is exactly the order these drivers had finished on the podium at the Indian race last year.
Vettel had won the inaugural race, ahead of Button and Alonso.
Lewis Hamilton (1:28.046) was fourth in the second McLaren, followed by Red Bull's Mark Webber (1:28,175).
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Felipe Massa was seventh, sandwiched between the two Mercedes' driven by Nico Rosberg and Michael Schumacher.
Daniel Ricciardo was impressive for Toro Rosso by taking the ninth place, ahead of Lotus' Kimi Raikkonen.
Force India's Paul di Resta was 12th, with a timing of 1:29;760 behind Williams' Valtteri Bottas, who replaced his teammate Bruno Senna.
Nico Hulkenberg recorded his fastest lap in 1:29.850, which was good enough for a 14th place.
Sauber's Sergio Perez, who will replace Hamilton in MacLaren next season, did not take part in FP 1 as he is down with fever. Their reserve driver Esteban Gutierrez took his place.
India's Narain Karthikeyan was 22nd with a best lap of 1:32.125.