India's top player Ankita was edged out by her less fancied opponent Peangtarn Plipuech of Thailand in a two-hour-and-five-minute tussle at the Navi Mumbai Sports Association courts.
The Thai girl came back after dropping the first set to win 4-6 7-6(7-5) 6-1.
Eighth-seeded Georgian Oksana Kalashnikova ended the run of Rutuja 6-2 6-3 to enter the last eight of the event.
In the first set Ankita broke the hard-serving Plipuech in the ninth game to clinch it 6-4 and then led 5-4 and 6-5 in the second to raise visions of victory, but her rival held on in the 10th game and 12th games to force a tie-break.
In the decider, Raina looked jaded and went down without a fight.
Three other seeds -- No. 2 Diana Marcinkevica of Latvia, No. 3 Gioia Barbeiri of Italy and sixth seed Jade Windley of Britain -- were also dumped out of the singles.
Britain's doubles specialist Anna Smith shocked Latvian Diana 1-6 6-3 6-3 in five minutes under 2 hours, while 18-year-old Kamila Kerimbayeva of Kazakhstan, runner-up at the Pune ITF event last week, stunned Italian Gioia 6-2 6-1 in just an hour.
In other second round matches top seed Magda Linette of Poland stayed on course for the title disposing of Thailand's Nungnadda Wannasuk 6-3 6-2.
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