Vijender (75kg), the first Indian boxer to bag medals at World Championship and the Olympics, went down to reigning European champion and fifth seed Jason Quigley of Ireland.
"It was a very close fight and in my thoughts and mind, I have not lost. I gave my best and I believe that I did not deserve to lose," Vijender, who fought through viral fever in his opening bout, told PTI.
However, former Asian Championships silver-medallist Nanao (49kg) and reigning Asian champion Shiva (56kg) ensured that India had reason to smile by making the last-16 stage.
Nanao, after getting a first-round bye, gave the perfect start to the day as he defeated Scotland's Aqeel Ahmed 3-0.
"All of these boys fought very well, but while Shiva and Nanao won, Vijender ended up on the losing side. Each one of them were excellent and gave it their all. Vijender also fought very well," national coach Gurbax Singh Sandhu said.
Shiva, who is seeded fourth, then got the better of Filipino Mario Fernandez. Shiva had also got a bye in the opening round. Shiva will face Argentina's Alberto Melian in his last-16 bout on Monday.
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