India, having suffered the first loss to Thailand on Sunday in Group B, fought hard despite losing first two matches. B Sai Praneeth and Sourabh Verma won the singles contests but Hong Kong proved stronger in the doubles.
With top two teams advancing to the quarter-finals, India's hopes have all but ended as it is the only side that is without a point yet. Indonesia, Thailand and Hong Kong all have a point each.
India will play their final group game on Wednesday against Indonesia, which has a much stronger team than Hong Kong.
World No.21 Ajay Jayaram faltered against No.11 Ka Long Angus Ng 13-21, 12-21 in 31 minutes and later Hong Kong made it 2-0 when Chin Chung Or and Chun Man Tang beat India's top pair of Manu Attri and B. Sumeeth Reddy 21-19, 21-12 in 32 minutes.
World No.34 Praneeth put up a valiant display as he overcame No.14 Hu Yun 23-21, 23-21 in 47 minutes. This win opened the account for India.
However, Hong Kong sealed the contest in the second doubles rubber as Tsz Kit Chan and Cheuk Him Law took only 24 minutes to crush the challenge of Satwiksairaj Rankireddy and Chirag Shetty 21-10, 21-11.
In the third singles match, Sourabh stunned world No.17 Wei Nan 17-21, 21-19, 21-9 in 47 minutes to make it 2-3.