The 22-time Grand Slam winner, 35, had applied for special permission to enter the US because he is not vaccinated against Covid-19.
BBC reports the US requires international visitors to be vaccinated and proof will be required until at least 10 April.
Djokovic missed last year's US Open because of his vaccination status.
"World number one Novak Djokovic has withdrawn from the 2023 BNP Paribas Open. With his withdrawal, Nikoloz Basilashvili moves into the field," organisers said in a statement.
Indian Wells - one of the most prestigious tournaments on the tennis calendar outside of the Grand Slams - starts on 6 March.
Last week, the United States Tennis Association and the US Open said they were "hopeful" Djokovic would be allowed to play this month's Indian Wells and Miami Masters 1,000 events.
Djokovic, who also missed last year's Australian Open and was deported from the country because of his vaccination status, has said he would skip Grand Slams rather than have a Covid-19 vaccination.
He was permitted to travel to Melbourne in January and won a record-extending 10th Australian Open title, tying Rafael Nadal's men's record of 22 Grand Slam wins.
Photo Photo: WILLIAM WEST Caption: World number one Novak Djokovic