Sharma (6/51) justified captain MS Dhoni's decision to bowl first on a greentop as the lanky pacer kept the host batsmen on their toes with his testing line and length.
Rising pacer Mohammad Shami (4/70) also contributed in India's dominating performance on day one as he picked up key wickets of Kane Williamson (47) and debutant James Neesham (33) at crucial junctures.
Opener Shikhar Dhawan then hit an attacking unbeaten half-century as India reached 100 for two at close, still trailing by 92 runs at the Basin Reserve.
Dhawan (71) and night-watchman Sharma (3) were at the crease after the visitors lost the wickets of opener Murali Vijay (2) and Cheteshwar Pujara (19).
Sharma continued with his splendid show from the first Test as he claimed his second five-wicket haul of the series and fifth overall in his 55th Test.
Sharma took three wickets in the first four overs of his morning spell and that laid the foundation for India's hugely successful day when they are hoping to level the series.
While experienced speedster Zaheer Khan hit probing lengths immediately, Shami was still in the same mode as at Eden Park, bowling a tad short and looking for bounce from the wicket than movement in the air. However, he was negotiated easily by the batsmen as the Kiwi openers took 14 runs off his first three overs.
It meant that Sharma was introduced into the attack as early as the eighth over and thereon, went on to bowl unchanged for nine overs, turning the morning session Indias way.
Hamish Rutherford (12) was unable to keep down a well-aimed short ball and was caught by Vijay at first slip. Two overs later, Sharma bowled an inswinger that hit Peter Fulton (13) on his pads and was trapped LBW, resulting in another poor start for the Kiwis.
In his third over of the morning then, the bowler continued his good work and made debutant Tom Lathams day a bad one, dismissing him for a duck in his first Test innings.