Allen has had a promising start to his career, having hit 564 runs in 23 T20Is, including two half-centuries and a century. In ODIs, he has accumulated 308 runs in eight matches.
"The emergence and success of Finn at the top of the order in white-ball cricket means a guy of the class of Martin Guptill misses out - that's just the nature of high performance sport," Stead said in an NZC release.
"With the 50-over World Cup less than a year away we're keen to give Finn every opportunity to keep gaining ODI experience, especially against quality opposition such as India. The message to both those players is that there's a lot of international cricket ahead and the door is certainly not closed to them.
"When Trent opted out of his NZC contract in August, we indicated that priority would be given to those players with either central or domestic contracts, and that's been the case here. We're all aware of Trent's world class ability, but at this time - as we build towards more global events, we want to give opportunities and experiences to others."
Allrounder James Neesham will not be part of the third ODI in Christchurch as he prepares for his wedding, with Henry Nicholls replacing him for the match. According to the release, Ben Sears and Kyle Jamieson were not considered for selection due to back injuries.
With Boult being dropped from the squads, the pace department now has Tim Southee, Matt Henry (ODIs only), Lockie Ferguson, Blair Tickner and Milne.
The tour begins with the T20I in Wellington before the teams move to Tauranga and Napier for the second and third T20Is on November 20 and 22. The ODI leg commences on November 25 in Auckland, with the second match in Hamilton on November 27 and the final in Christchurch on November 30.
ODI squad: ODI squad: Kane Williamson (capt), Finn Allen, Michael Bracewell, Devon Conway, Lockie Ferguson, Daryl Mitchell, Adam Milne, Jimmy Neesham, Glenn Phillips, Mitchell Santner, Tim Southee, Tom Latham (wk), Matt Henry.
T20I squad : Kane Williamson (capt), Finn Allen, Michael Bracewell, Devon Conway (wk), Lockie Ferguson, Daryl Mitchell, Adam Milne, Jimmy Neesham, Glenn Phillips, Mitchell Santner, Tim Southee, Ish Sodhi, Blair Tickner.