India did well to restrict Australia to 354 for six after the hosts were sitting comfortable at 206 for two on day one of the Test.
Sharma, picked ahead of Ravichandran Ashwin, dismissed David Warner (145) conceding 89 runs in 23 overs.
"Playing Karn Sharma was a great move. I liked how he kept his head up despite Warner and Clarke going after him. One has to remember there is absolutely nothing in this pitch for him," Gavaskar said.
He also liked how Ishant Sharma bowled, taking one wicket for 89 runs.
"Ishant bowled well within himself. He did not get carried away and soon realised what the conditions would be like," said the former India captain.
Gavaskar said India must bowl out Australia for less than 420.
"India must bowl out Australia for a score of 420 or 410. The first hour of the second day is crucial for both teams," said Gavaskar.
He said the lack of a quality all-rounder continues to cost India.
"India does not have a quality all-rounder and that's why they are struggling. An all-rounder gives you that option as someone who can bowl and also be used as an extra batsman," he said.

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