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Former world No. 1 Kidambi Srikanth continued to flatter to deceive as he blew an 18-15 lead and two game points to lose to Indonesia's Shesar Hiren Rhustavito 10-21, 22-24.
Defending champion Lakshya Sen and former champion Saina Nehwal suffered contrasting defeats in their respective second round matches.
Two-time Commonwealth Games champion Saina went down 12-21, 21-17, 12-21 to Han Yue of China.
He became only the fourth Indian to win a silver medal in the competition.
Sen beat sixth seed Anthony Sinisuka Ginting of Indonesia 21-16, 21-12.
It was Srikanth's first win over his Malaysian opponent Lee Zii Jia in four meetings.
World No. 7 Satwiksairaj and Chirag dished out a gritty performance to outwit local favourites and defending champions Takuro Hoki and Yugo Kobayashi.
The two Indian men's doubles pair of Dhruv Kapila and M R Arjun and Satwiksairaj Rankireddy and Chirag Shetty also moved into the quarterfinals.
The women's doubles pair of Treesa Jolly and Gayatri Gopichand also made a winning start.
The prize for the Most Film Friendly state went to Madhya Pradesh, with Special Mention for Uttarakhand and Uttar Pradesh.