The seventh seeds from India lost 5-11 11-8 9-11 to eighth seeds Stuart Crawford and Greg Lobban of Scotland to bow out of the competition.
Ghosal's only hope of a medal now is in the mixed doubles alongside Dipika Pallikal.
"It feels really bad. We are out now and that's not what we would have liked obviously. I think they came out better in the first game than us. In the second game we were better than them and the third was quite neck and neck throughout. It is just sad we couldn't come out on top and they did," said a dejected Ghosal.
"Firstly there are four people on this court. I know it's slightly bigger but it's still crowded and you're trying to make sure you don't hit the other person. There were two or three occasions were Lobban hit the balls above our heads and I don't know if that's okay because if it is then people are just going to keep smacking the ball wherever and there has to be a warning for that," added Ghosal.
He plays his mixed doubles round of 16 match partnering Pallikal later today.
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