Sonam Malik defeated Sakshi Malik to cement a place in the Indian team for the Asian wrestling championships while Anshu Malik knocked out Pooja Dhanda in another encounter.
India won gold medals in all the wrestling events at the South Asian Games in Nepal.
Sakshi Malik accepted her mistake and told Wrestling Federation India (WFI) that she went home for the festival of Rakshabandhan.
Sakshi Malik has been issued a show cause notice by the Wrestling Federation India (WFI) and given deadline until Wednesday to submit her reply.
Pooja Dhanda lost her 57 kg bronze medal bout at the Asian Wrestling Championships
Competing in her first Asian Games in Jakarta last year, Sakshi lost her bronze medal bout to South Korea's Hang Jungwon.
The announcement to upgrade their contracts was made by WFI President Brijbhushan Sharan Singh.
It was the first good result for Sakshi Malik following the horrendous run, which began after the high of Rio Olympics.
Category A wrestlers will get Rs 30 lakh each every year.
Both Sakshi Malik and Ritu Phogat entered their respective repechage rounds at the World Wrestling Championships.
The Wrestling Federation of India (WFI) has selected 10 members each in freestyle, Greco-Roman and women's wrestling categories.
Sakshi Malik was the first Indian woman wrestler to win an Olympic medal.
Mumbai Maharathi outclassed Delhi Sultans 5-2 on the opening night of Pro Wrestling League season three at the Siri Fort Sports Complex on Tuesday.
Back in action after three-long years, two-time Olympic-medallist Sushil Kumar took less than three minutes to bag a gold medal as three of his rivals gave him a walk over in men's 74kg freestyle competition of the National Wrestling championship
Sakshi and Vinesh went down in their respective Round of 16 bouts.
Olympic medallist Sakshi Malik and Asian champion Bajrang Punia will spearhead the Indian challenge at the World Wrestling Championships
The squad for the tournament was announced after the Wrestling Federation of India conducted selection trials across weight categories at the STC Lucknow.