The target for both India and England is to surpass Australia's points percentage of 69.17.
What do India need to do to qualify?
India need to win the series by any margin, which means they need at least a draw and a win in the two remaining Tests. They started the series requiring a minimum of 70 points to go past Australia's points percentage. That meant they needed at least a 2-1 series win. With the series currently level at 1-1, India will be through to the final if they win 2-1 or 3-1.
What about England's chances?
The loss in the second Test has hurt England's chances in a big way. They now need to win both the remaining Tests to make the final. Anything less, and they will be out. History is against them as well - the last touring team to win three Tests in a series in India was West Indies in 1983-84.
Who will Australia be cheering for?
Australia would be hoping that India don't win the series, and that England don't win both the remaining Tests. That means, for Australia to finish ahead of both India and England, the series should either finish in a draw - 1-1 or 2-2 - or England should win 2-1.
Whatever the result in the third Test, Australia will still have a chance to qualify if the fourth Test pans out favourably for them:
If India win the third Test: Australia can qualify only if England win the final Test and level the series 2-2
If England win the third Test: Australia can qualify if India win the fourth Test, or if it is drawn
If the third Test is drawn: Australia can qualify if England win the fourth Test, of if it is drawn
Australia are still in it, but they could have avoided all this uncertainty had they not dropped four points because of a slow over-rate against India in the Boxing Day Test. Had that not happened, Australia would have been level with New Zealand on 70, which would then have brought the runs-per-wicket ratio into play (that is the ratio of the runs scored per wicket lost, and the runs conceded per wicket taken). Australia's ratio is currently 1.39 while New Zealand's is 1.28.
This means Australia would have stayed ahead of New Zealand, and would have been certain of qualification. Now, they will need India and England to help them out.
Of course, the over-rate lesson is one that both India and England will do well to heed: any points docked due to slow over-rates in the next two Tests could affect the qualification hopes of these two teams as well.