Trailing 0-2, India, after being all out for 224 in the first innings, saw England stretch their lead to 232. Gambhir, however, believed that it would be wrong to dismiss his team on the basis of poor performance in one series.
"One series here and there doesn't take the credit away from us. We've played some good cricket over the last two and a half years. We still have a lot of talent in dressing room, there is still a lot of cricket left in the series and we can play some good cricket and try and show some character."
One of the biggest concerns facing the Indian batsmen has been their inability to perform in conditions which favour seam and swing bowling.
"Whenever you go overseas and your batsmen are not able to do well, you face the same question. If we had not done well in South Africa, we would have faced the same question," he said.
The left-hander believed while England were able to seize the initiative, his side wasn't able to hold on to its advantage in the series.
"One needs to give credit to England. They have always taken the initiative. They have put us in a lot of pressure," Gambhir said.
"No doubt we are not able to hold on to our chances. But it's not due to shortage of effort. Sometimes things don't go your way. Hopefully, in the coming days the rub of green goes our way and we can show some character and live up to our reputation and talent," Gambhir said.
According to Gambhir, India's biggest concern has been their failure to make good starts count.
"Unfortunately, we haven't been able to convert those 30s and 40s into big runs, except (Rahul) Dravid. That's the only difference. England, on the other hand, has batted well. Cook has batted brilliantly and shown lot of patience, grit and determination. That's Test cricket — when you are in, try to make as big runs as possible.
"While Cook made the most of it, that's where we have been lacking. We also have done so in the past. If we had put 50 runs in the first innings, it would have been a different story," he said.
Despite the host bowlers' sterling performances in the series so far, Gambhir was not ready to rate the present England attack as the best he has played in his career.
"England has a good attack but South Africa was equally good. There we were able to convert those starts into big runs. But England have never let us off the hook. They have always been putting us under pressure. They are very good as a unit — not just one or two but all four bowlers."
India's fielding, along with their batting, has also been below par in the series — they dropped three catches on the second day."There are no excuses, it's just a matter of concentration. All teams drop catches. These things happen in cricket. This is not the first or the last time it would happen," Gambhir said.
A lot of criticism has come India's way with the common observation that they have been playing too much lately.
"I can't answer it — BCCI decides (the scheduling). The only thing I can say is wherever we play, we give our 100 percent. We do with whatever is left in our tanks."
Gambhir conceded that England hold all the aces in the match. "We are under a lot of pressure. England hold a lot of edge in this Test. But we still have character to fight till the end. We have done it in the past — in Napier, we needed to bat for two and a half days and we did it. We need to show the same grit."
England are now on the cusp of being world's number one Test side but Gambhir believes there biggest challenge would be to perform away from home.
"It's easy to be number one, it's difficult to sustain it. If you are number one for just one or two series, it doesn't make a difference.
"Except for Ashes, England have played a lot of cricket at home. The biggest challenge for them would be when they go overseas," he said.