He had five birdies and two bogeys for an 8-under 136 total at the Delhi Golf Club.
'I've been playing well lately, so all I need to do is just keep doing the same thing,' McGrane said.
Hendrik Buhrmann, Raphael Jacquelin and Graeme McDowell each shot 69 and were two strokes back.
Overnight leader Jyoti Randhawa, whose opening 65 capitalized on his familiarity with the course, had a 77 to slip into a tie for 15th.
Ernie Els shot 70 to avoid the cut by two strokes, but sits tied for 44th.
The Indian Masters marks the arrival of European Tour in India.