Arothe, who previously had a stint as the India women fielding coach and head coach between 2008 and 2012, has replaced former skipper Purnima Rau.
The 50-year-old has been appointed till the World Cup to begin with.
"The call came from the BCCI asking if I'd be keen. An opportunity to coach the national team is something I didn't want to miss," Arothe was quoted as saying by ESPNcricinfo.
"I've had prior experience of coaching the women's team, so familiarity, at least with the seniors, won't be an issue," he added.
Arothe further said that the biggest challenge for him would be to get the team conditioned for the World Cup.
The Barodian believes the Indian team don't lack in batting and bowling but fielding and fitness is one area where they have work on.
"From the time I left till now, there are a lot of young players who have come through. The biggest challenge will be to get the team conditioned for the World Cup. We don't lack in batting and bowling, but fielding and fitness is an area that we lag in comparison with some of the other big sides. That will be the prime focus at the camp in Mumbai," he said.
Last year, Arothe was appointed head coach of the Baroda men's team for the 2016-17 season, but had to resign due to conflict of interest following the selection of his son Rishi. He has also served as head coach of Chhattisgarh and Baroda Under-16s.
All-rounder Rau, who represented India in five Test and 33 ODIs, was first appointed in February 2014, but was sacked after the team's first-round exit at the Women's World T20 that year.
Later on in June 2015, she was reappointed with the team seeking headway to earn direct qualification for the World Cup.
Under Rau, India went on to win the ICC Women's World Cup Qualifier earlier this year in Sri Lanka by beating South Africa in a final-ball thriller in the finale and also recorded their first-ever bilateral series win in Australia in January 2016.
India will next participate in a quadrangular series in South Africa, also involving Ireland and Zimbabwe, in May.
That would be followed by World Cup where India will face England in the tournament opener on June 24 in Derby. (ANI)