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The Kerala side lost 1-2 to East Bengal in a tight match in Kolkata.
Gokulam had already qualified for the quarterfinals by topping Group C with six points, having won both their opening matches.
Kerala Blasters failed to advance from Group C and ended with four points from three matches.
Gokulam have advanced as toppers from Group C with two wins in two matches.
The Malabarians, who had defeated Indian Air Force FT 2-0 in their opener, lead the group with six points from two matches.
Sourav drew first blood for the Malabarians in the 36th minute. Striker Sreekuttan doubled the lead in the 67th.
Alex Sanchez, 34, is the third foreigner to be recruited by Gokulam this season.
The 132nd edition of Asia’s oldest football tournament begins on August 3 (Thursday) and will feature 24 teams.
Ganesan, who is also the governor of Manipur, was severely criticised for his petty act.
In the final in Kolkata, Bengaluru defeated Mumbai City 2-1.