Viswanathan Anand gave the Indian team a flying start against top seeds and defending champions Russia and raised hopes of a stunning upset in the ninth round of the 36th Chess Olympiad at the Gran Casino in Mallorca.
As Anand beat Alexander Morozevich on the top board, Krishnan Sasikiran did extremely well to hold Peter Svidler on the second board with black pieces.
However, Pendyala Harikrishna and Surya Sekhar Ganguly were unable to maintain the tempo and both lost their games and India went down 1.5-2.5.
With that defeat India (22.5) slipped to joint sixth place, as Ukraine (27) and Russia (24.5) kept the top two spots.
India will meet Cuba (22.5) in the tenth round and a good score in this match could put India back on track.
The Indian women beat Ukraine 2-1 and moved into joint second position. They will now meet Russia in the next round. China lead the standings, six points ahead of a second placed group of four teams, including India.
Barring the top board, the Russians were higher rated on each of the other three boards. Leading from the front, Anand crashed through the defences of Grandmaster Alexander Morozevich (2758) in what was the top clash of the tournament.
Krishnan Sasikiran (2668) also did well on the second board in getting an easy draw as black against Russian champion Peter Svidler (2735).
Ganguly (2559) lost a complicated game to Vadim Zvjaginsev (2650) while Harikrishna (2612) missed out on a winning sequence against Alexey Dreev (2698) and eventually lost.
At one stage, with both Ganguly and Hari in good positions, there was even the possibility of a 3-1 win for India, which would have put India into a strong position for a medal. However, those winning chances were lost.
Meanwhile, leaders Ukraine played a 2-2 draw with fourth seeds Armenians on the top table. They are still on top with 27 points, 2.5 points ahead of Russia (24.5).
With just five more rounds remaining, the United States scored a big 3.5-0.5 win over Spain and moved to sole third place at 24.
Armenia and third seed Israel were in joint fourth spot on 23 points while the Indians shared the sixth spot on 22.5 along with Switzerland, Bulgaria, France, Slovenia, Azerbaijan and Cuba. Poland and Moldova were next in line on 22 points each.
The Indian women beat a strong Ukrainian side 2-1 and moved into joint second position.
Koneru Humpy set up the win with a win over Natalia Zhukova and then S Vijayalakshmi (2411) drew with Inna Gaponenko (2445) and D Harika (2391) drew with Kateryna Lahno (2435).
China lead the field with nine wins in as many matches and a total of 23.5 points, which is six points ahead of second placed group of four teams that include Russia, United States, India and Hungary. India and China are the only teams with no defeats, but the Indians have drawn three matches.
Important Results Round 9:
Ukraine (27) drew with Armenia (23) 2-2; Spain 'A' (21) lost to the US (24) 0.5-3.5; India (22.5) lost to Russia (24.5) 1.5-2.5; Poland (22) lost to Switzerland (22.5) 1.5-2.5; Germany (21.5) lost to Bulgaria (22.5) 1.5-2.5; Georgia (21.5) lost to France (22.5); China (21.5) lost to Slovenia (22.5) 1.5-2.5; Kazakhstan (20) lost to Israel (23) 0.5-3.5; Azerbaijan (22.5) beat Philippines (20.5) 3-1; Moldova (22) beat Serbia Montenegro (21) 2.5-1.5; Hungary (21.5) beat Slovakia (20.5) 2.5-1.5; Cuba (22.5) beat Denmark (19.5) 3.5-0.5; Czech Republic (21.5) beat Estonia (20.5) 2.5-1.5; Uzbekistan (21.5) beat Netherlands (20) 3-1; Sweden (21) beat Spain 'B' (19) 3-1; Romania (20) drew with Belarus (20.5) 2-2; Iceland (20) drew with England (20) 2-2; Greece (21) beat Brazil (19) 3-1; Latvia (21) beat Mexico (19) 3-1; Scotland (18.5) lost to Bosnia Herzegovina (21.5) 0.5-3.5.
Important Results Round 9:
China (23.5) beat Lithuania (16.5) 3-0; Russia (17.5) drew with Hungary (17.5); Unite States (17.5) beat Poland (15.5) 2-1; India (17.5) beat Ukraine (16.5) 2-1; Armenia (16.5) beat England (16) 2-1; Serbia Montenegro (16) drew with France (16) 1.5-1.5; Sweden (17) beat Mongolia (15) 2.5-0.5; Israel (15.5) lost to Georgia (16.5) 1-2; Bulgaria (14.5) and (14); Latvia (17) beat Switzerland (14) 3-0; Sdovakia (16) beat Kazakhstan (15) 2-1; Moldova (16) beat Lovenia (15) 2-1; Spain 'B' (14.5) lost to Germany (15.5) 1-2; Azerbaijan (14.5) lost to Netherlands (15) 1-2; Argentina (14) lost to Cuba (16) 0.5-2.5; Romania (15.5) beat Australia (14) 2-1; Czech Republic (15) beat Greece (14) 2-1; Belarus (15) beat Estonia (13) 2.5-0.5.