Kashyap lost 10-21 22-20 13-21 to former World No. 6 and third seed Qiao Bin of China in a contest which lasted an hour and 16 minutes at the Olympic sports center.
The tournament was Kashyap's return to competitive badminton after recovering from a shoulder injury. He had suffered the injury during the Premier Badminton League (PBL) in January.
Harsheel Dani remains the sole Indian in fray in the tournament and will play another Chinese Sun Feixiang in the pre-quarterfinals of the men's singles event later in the day.
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