South Africa were restricted to 219/8 in 50 overs in their previous match against Pakistan with only David Miller getting amongst the runs.
"South Africa will know that it will have to bat better, as individuals and as a unit, than it did against Pakistan. As a squad, they really do cover all bases and will be keen to show that the squad depth can translate to winning key games such as this," Smith wrote on the official website of the International Cricket Council (ICC) on Saturday.
"As the number-one ranked side in the world, you have to be at the best, and India will prove to be tough opposition with the talent it has."
He also pointed out India having considerably improvised in their seam bowling department.
"One area where I feel India has improved out of sight, certainly since my playing days, is in its seam bowling. It came unstuck against Sri Lanka on Thursday, but in general, its key seamers in Bhuvneshwar Kumar, Umesh Yadav and Jasprit Bumrah have come in to this tournament full of confidence," he said.
"So, often we've seen India rely on its seemingly endless flock of quality spinners, but we're now seeing its seam options keeping someone with the quality that Ravichandran Ashwin possesses being left out in their favour. It will be interesting to see what their plans are against South Africa," he added.
The former left-handed batsman also hailed Indian all-rounder Ravindra Jadeja as a three-dimensional cricketer.
"In Ravindra Jadeja, India has a truly three-dimensional cricketer who has won his side a lot of games in recent years. How batters go about playing him is so dependent on the surface, and given how well Sri Lanka played him on a great wicket at The Oval. I hope to see South Africa's many good players of spin be positive against him in particular," he said.
Smith also mentioned how the Indian Premier League (IPL) has helped the South African players to play spin better.
"Many of the South African squad players have experience in competitions like the IPL, and they'll be confident in their ability to dominate against quality spin," he reckoned.
"Players like Faf du Plessis and David Miller are excellent at using their feet, but it'll come down to their execution on Sunday, which has to be better than in the game against Pakistan if South Africa are to win and progress further."
South African pacers Wayne Parnell and Kagiso Rabada also got a mention from Graeme Smith after having failed to take wickets against Pakistan.