Before going into the game, India's singles player G Ruthvika Shivani was ruled out due to back pain and was replaced by doubles specialist Rutuparna Panda.
In the first women's singles match of the tournament, which also serves as Asian qualification for the 2018 Thomas and Uber Cup, Sindhu outplayed Fitriani Fitriani 21-13, 24-22.
In the second game, the duo of Ashwini Ponnappa and Sikki Reddy were defeated 5-21, 16-21 by world No. 7 Greysia Polii and Apriyani Rahayu in a 29 minutes encounter.
Sri Krishna Priya Kudaravalli also lost her women's singles match 8-21, 15-21 to Hanna Ramadini to make the tie 1-2 in Indonesia's favour.
In the decisive match, the doubles pair of Sanyogita Ghorpade and Sindhu went down to Anggia Shitta Awanda and Ni Ketut Mahadewi Istarani 21-9, 21-18 in just 32 minutes.
Earlier, the women's team, led by Sindhu, defeated Hong Kong by 3-2 in the tournament which also serves as Asian qualification for the 2018 Thomas and Uber Cup.
India are however out of the tournament but can still qualify for the Uber Cup in May on the basis of the team's world ranking. (ANI)