Mayank Agarwal will make his debut in the Boxing Day Test.
India have dropped both opening batsmen from the side that lost the second Test in Perth.
Spinner Ravichandran Ashwin has also been ruled out of the Boxing Day Test against Australia after failing to recover from an abdominal injury.
Ashwin missed the second Test in Perth where India fell to a 146 run defeat to level the series and while the team management hoped he would recover to take his place in the side the 32 year old was missing from the starting 11 announced by the country's cricket board on Tuesday.
Openers Lokesh Rahul and Murali Vijay have paid the price for putting together just one double digit stand at the halfway point of the four Test series. Paceman Umesh Yadav has also been dropped.
Spinning all-rounder Ravindra Jadeja comes into the side after recovering from a shoulder issue.
Rohit Sharma and Mayank Agarwal, who will make his Test debut, have been drafted in for the third Test at the Melbourne Cricket Ground.
India, who are looking to win their first series in Australia, won the opening Test in Adelaide by 31 runs. The series will shift to Sydney for the finale beginning on January 3.
India: Virat Kohli (captain), Ajinkya Rahane, Mayank Agarwal, Hanuma Vihari, Cheteshwar Pujara, Rohit Sharma, Rishabh Pant (wicket-keeper), Ravindra Jadeja, Mohammed Shami, Ishant Sharma, Jasprit Bumrah