The trio of Tarundeep Rai, Jayant Talukdar and Rahul Banerjee lost out to the Japanese team of Furukawa Takaharu, Kikuchi Hideki and Ishizu Yu in a shoot-off.
India took their Asian counterparts into a tie-breaker and lost 27-29. With the Japanese scoring two 10s and a nine in the final round, India only managed three nines in a row.
But it could have been a different story for the team had they held on to their lead during the regular session. After nine arrows, India were leading Japan 80-78 and extended it 109-106 after 12 arrows.
But Japan slammed two 10s in a row to turn the tables and India had to keep their nerve in the last set to level things at 214 points each and play a shoot-off.
The Japanese were bang on target when it mattered most, with the first two attempts bagging them 10 points and their last attempt a nine.
But each of the Indian archers could only score nine points in all their attempts, thus losing by just a couple points in what turned out to be a thrilling contest.
All is not lost though, with the individual even scheduled for 31st July. Jayant Talukdar will take on America's Wukie Jacob, Rahul Banerjee will face off against Mongolia's Jantsang Gantugs and Tarundeep Rai will test his marking skills against Cuba's Juan Carlos Stevens.