The hosts scored 417 runs on the day, allowing them to reach 441-6 and establish a lead of 374.
After a free-scoring morning's play, the drama unfolded with the last ball of the afternoon session.
When Eoin Morgan's shot looked to have gone for four, Ian Bell left his crease believing it was the end of the over.
However, the ball was thrown to Abhinav Mukund who knocked the bails from the stumps. India referred the decision to the TV umpire who confirmed Bell was out as the ball had not hit the boundary as originally thought and was still in play.
The crowd inside Trent Bridge showed their displeasure at the decision with a chorus of boos before the players left the field for the break.
As many fans jeered the arrival of the umpires and Indian players after the interval, spectators were left bemused as Ian Bell returned to the field.
It was later revealed that England captain Andrew Strauss and coach Andy Flower approached the Indian dressing room to ask captain MS Dhoni to reconsider upholding the decision.
Dhoni accepted the request and decided not to uphold the decision, allowing Bell to return to the crease.
Bell was eventually bowled out for 159 and shook hands with Dhoni and the other Indian players as a sign of appreciation for their change of heart.