it could set the stage for a showdown with current No. 1 Serena Williams later in March in Miami.
Once again, Williams and her sister Venus are skipping the BNP Paribas Open, where other notable absentees include China's Li Na.
World No. 5 Li is still battling the nagging effects of the left ankle injury she suffered in losing the Australian Open final to Azarenka.
Women's main draw play in the combined WTA and ATP Masters tournament begins on Wednesday, although the top 32 seeds all enjoy first-round byes.
World No. 3 Maria Sharapova, routed in straight sets by Azarenka in last year's final, is seeded second ahead of Poland's Agnieszka Radwanska and Germany's Angelique Kerber.
Roger Federer is the defending men's champion, and seeded second behind world No. 1 Novak Djokovic.
Federer's hold on the number two ranking could be in jeopardy, with Scotland's Andy Murray in position to overtake him by reaching the final of the first Masters event of the season.
If Murray wins the tournament, he is assured of moving to No. 2. If he finishes runner-up, Federer must reach the semi-finals or better to retain the second spot.
The men's field also features Rafael Nadal, who ended a seven-month injury absence with a Latin American swing of three clay court tournaments that yielded a runner-up finish in Vina del Mar, Chile, and titles in Sao Paulo and Acapulco.
He's hoping Indian Wells will prove his left knee is up to the rigors of a hard court tournament.
Azarenka, 23, could face a tricky second-round opener against two-time former champion Daniela Hantuchova. The Slovakian faces a qualifier in the first round.
Azarenka could face American Sloane Stephens in the fourth round. The two last met in the Australian Open semi-finals, when Azarenka squandered five match points, took a medical timeout and returned to triumph.
Some commentators viewed it as gamesmanship, although Azarenka insisted she had a genuine health issue.
Also in the top quarter of the draw is world No. 10 and 2011 champion Caroline Wozniacki of Denmark.
In the bottom half of the draw, Sharapova faces a tough opener against one of two former top-10 Italians, Francesca Schiavone and Flavia Pennetta.
Sharapova, the winner here in 2006, is pointed toward a quarter-final clash with sixth-seeded French Open finalist Sara Errani of Italy.
Poland's Radwanska is seeded to meet fifth-seeded Czech Petra Kvitova -- a former Wimbledon champion -- in the quarters.
Kvitova posted her biggest success in 15 months with a three-set victory over Errani in the final of the Dubai Open in February.