Australia all-rounder Mitch Marsh has been recalled for the Boxing Day Test against India in Melbourne.

Captain Tim Paine confirmed the return of Marsh at the expense of struggling batsman Peter Handscomb on the eve of the third Test.

Marsh missed the first two Tests against India after he was dropped for Handscomb ahead of the Adelaide opener.

However, Handscomb's poor form which only yielded 68 runs in four innings saw the return of Marsh with the four-Test series locked at 1-1 following Australia's victory in Perth.

"I'm sure Pete would be upset. I think he's had conversations with the selectors that there's a few things he needs to work on and Pete is open to that," Paine told reporters.

 

Australia squad: Tim Paine (captain), Josh Hazlewood, Mitch Marsh, Pat Cummins, Aaron Finch, Marcus Harris, Travis Head, Usman Khawaja, Nathan Lyon, Shaun Marsh, Peter Siddle, Mitchell Starc.