The 28-year-old has failed to shrug off a shoulder problem which he picked up during Australia's seven-wicket defeat against the Virat Kohli-led side in the fifth ODI of the five-match series in Ranchi.
Smith has experienced discomfort while batting and throwing since landing on his right shoulder during that match, thus forcing national selectors to call in Marcus Stoinis as his replacement for the T20Is.
"Smith landed awkwardly on his right shoulder whilst diving in the field during the fifth ODI against India last Sunday.Following the match, he complained of shoulder soreness which has not settled and is restricting his ability to bat and throw," ESPNcricinfo quoted team doctor Richard Saw, as saying.
The doctor, however, confirmed that Smith had undergone an MRI scan which has excluded any serious injury and, therefore, they remain confident that the skipper would be fit in time for the Sheffield Shield season.
"Subsequently, he has had an MRI scan which has excluded serious injury. But we believe the best course of action is for him to not continue to aggravate his shoulder and allow it to recover. He will have a further investigation upon his return to Australia, but we remain confident he will be available for the start of the Sheffield Shield season," Saw added.
In Smith's absence, David Warner will lead the side in the Twenty20 internationals, beginning in Ranchi this evening. (ANI)