Ferrari's Fernando Alonso suffered no repeat of the gearbox problem that marred his opening run Friday to finish third fastest, .773 off the pace. Nico Hulkenberg was fourth for Sauber.
Vettel, who has won both previous Indian GP races from pole, can win his fourth straight world title by placing fifth or better Sunday. Qualifying is scheduled for later Saturday.
In-form Lotus driver Romain Grosjean was fifth in practice, followed by Ferrari's Felipe Massa.
Hulkenberg was involved in a mishap in the Sauber pit box, swerving into the spare jack and clipping the foot of a mechanic, knocking his shoe off. The team later said the mechanic appeared to be only bruised.
The start of the session was delayed by 20 minutes after organizers deemed the haze over the track would prevent the race's medical helicopter from flying.
Seasonal atmospheric conditions have produced dense morning mists at Greater Noida, with similar conditions forecast for Sunday.