The four-strong team, which has Somdev Devvarman and Rohan Bopanna as the other two members, was announced after a meeting of the selection committee, headed by Anil Dhupar.
Somdev will lead India's challenge in the singles along with Rohan Bopanna, while estranged partners Paes and Bhupathi, who only come together for national duty, will compete in the men's doubles event.
The committee also nominated teen sensation Yuki Bhambri, Vishnu Vardhan and national champion V M Ranjeet as three reserve players for the Games.
The selection of the women's team was deferred for a week till the completion of the coaching camp in Pune on the recommendation of coaches -- Jaidip Mukerjea, Nandan Bal and Enrico Piperno.
Paes, Bhupathi, Somdev and Bopanna have also been nominated for the Davis Cup tie against Brazil in September.
"It was proposed that Vishnu Vardhan, V M Ranjeet and Divij Sharan would be the reserves. S P Misra will be the non-playing captain of the team," an AITA release said.
No decision was taken on India's tennis squad for the Asian Games in November due to clash of the ATP World Tour Doubles with the Asian Games.
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