India head coach Ravi Shastri has admitted that his team was "outplayed" in Wellington, but that defeat has only shaken them up to improve their performance when they take on New Zealand in the second and final Test beginning Saturday at the Hagley Oval.

India had to face a crushing 10-wicket defeat in the first Test, which was also their first loss in the ongoing ICC World Test Championship.

"We were outplayed in the first test, but I always believe that a shake-up like that is good. It opens your mindset," Shastri said at the pre-match presser on Friday.

"If you have not tasted defeat you can have a closed or fixed mindset. Here, when you see what has happened, it is good and it gives you opportunities to learn.

"You know what New Zealand are doing and what to expect. It's a good lesson and the boys are up for the challenge," he added.

He further said that the team need not panic following their loss at the Basin Reserve. "One loss does not mean that we need to panic. The boys are ready. They know what to expect and they are mentally tuned."

"You generally do that when you see something which is not right and then you have a solution for it. I am not one of those coaches you will ask to do something without having an answer. When you are on the road, things can change," he added.

The defeat in Wellington did hurt the team and Shastri made it clear that Test cricket remains on top of his team's agenda followed by T20s during next two years when ODIs are "least priority".

"I wouldn't judge ODI and Test cricket as they are totally different things. For us, the least priority is ODI cricket at the moment. Because of the schedule and what's coming up in the next two years. Our focus -- Test cricket is No.1 and T20 cricket," said Shastri.

The Indian head coach further said that ace off-spinner Ravichandran Ashwin needs to work on his batting which has slipped in the recent times. Ashwin, who has four Test centuries along with his 365 wickets, has not passed 50 since August 2017 and has scored a total of 126 runs in his last 10 matches.

"He is a world class bowler," Shastri said. "There is absolutely no doubt about it. But ... he will be disappointed in the way he has batted and he will need to improve that."

Asked for his opinion as to why teams struggle away from home, the Indian head coach said the problem was only with the Test format.

"It's the red ball. The conditions of red and white balls are completely different...touring a country playing white ball cricket, the red ball is totally different especially in England and New Zealand, where conditions can be pretty much similar," he said.

"It's any team and it will take a while to acclimatise," he added.