Steyn played in the first match of the tournament against England, but missed out on selection against Afghanistan and has now been kept on the sidelines for a must-win encounter against the Windies.
Proteas coach Russell Domingo opted to go with a second specialist spinner in left-armer Phangiso, who will play on a big stage for the first time after remodelling his action after he was reported for a suspected illegal bowling action while playing for the Highveld Lions recently.
The 32-year-old will form a double spin attack with Imran Tahir, while Kagiso Rabada got the nod ahead of Steyn and Kyle Abbott as the only specialist fast bowler.
Domingo decided to retain both all-rounders in David Wiese and Chris Morris, with Wiese’s ability to change his pace and bowl effective slower balls probably winning him a spot, while Morris was excellent with four wickets against Afghanistan.
In one injury-enforced change, left-hander Rilee Rossouw comes in for JP Duminy in the middle-order.
West Indies captain Darren Sammy won the toss and surprisingly decided to bowl first on a pitch that is expected to assist the spinners.
South African skipper Faf du Plessis said at the toss that he was “very pleased” that Sammy opted to bowl as he would’ve batted anyway.
* Follow @IndyCapeSport on Twitter for live updates of the SA vs West Indies match, which starts at 4pm.
Teams For Nagpur
SA: Hashim Amla, Quinton de Kock (wk), Faf du Plessis (captain), AB de Villiers, Rilee Rossouw, David Miller, David Wiese, Chris Morris, Kagiso Rabada, Imran Tahir, Aaron Phangiso.
West Indies: Chris Gayle, Johnson Charles, Andre Fletcher, Marlon Samuels, Denesh Ramdin (wk), Andre Russell, Dwayne Bravo, Darren Sammy (captain), Carlos Brathwaite, Samuel Badree, Sulieman Benn. - Independent MediaWest Indies captain Darren Sammy won the toss and put South Africa in to bat in their crucial World Twenty20 game.
Original source: #WT20 SA v WI - Proteas to bat first