D Ravana scored the only for goal for India, while Qatar's Jaralla Ali scored twice.
India's next match is against Singapore on Thursday, but even if they win that match they cannot qualify for the pre-quarter final league.
India's football team will return home on November 13, a day after the opening ceremony.
In 2006, India won only one match, beating Maldives 2-1. If they do not win this year, it will be the first Asian Games in which India fails to win a football match.