McCullum had cruised to 169 at lunch on the fourth day while Watling provided an admirable foil for the 32-year-old, reaching 90 at the break with New Zealand on 347 for five at the Basin Reserve.
New Zealand now hold an 101-run lead over the visitors whose hopes of victory now rest on whether they can break the partnership quickly to expose the tail.
McCullum and Watling have combined for 253 runs since shortly after lunch on day three when their side was in desperate trouble at 94 for five.
They have already passed New Zealand's highest sixth wicket partnership against India and are within sight of the record partnership for any wicket against them. Ross Taylor and Jesse Ryder scored 271 for the fourth wicket at Napier in 2009.
The naturally aggressive McCullum curbed his attacking instincts and battled problems with his shoulder and troublesome back in taking his side to a six-run lead at stumps on Sunday.
New Zealand resumed on 252 for five with McCullum on 114 and Watling on 52 and faced very little penetration from the India attack on a wicket that has flattened out.
The New Zealand pair scored 56 runs in 13 overs in the first hour of play, before McCullum passed 150 when he hammered his 18th boundary off paceman Zaheer Khan to the cover fence and raised his arms to generous applause from the small crowd.
McCullum, who scored 224 in the first test at Eden Park, had said that he would probably need to score another double-century to guide his side to safety.
India must win the match to level the two-test series after New Zealand won the first test by 40 runs.
(Editing by Ian Ransom)
