Asian junior champion Pallikal failed to get past ninth seed Annie Au of Hong Kong and lost 8-11 5-11 7-11 in straight games.
Annie Au overcame a slow start to beat Chennai-girl Pallikal, world ranked 34th, in the USD 56,000 WISPA World Tour squash event - the sixth WISPA Gold championship of the year - in Canberra.
Annie Au will next meet third seed Englishwoman Alison Waters in the second round, who beat Austrian qualifier Birgit Coufal 11-3 11-3 11-2 in the opening round clash.
Yesterday, world ranked 26th and India's top player, Saurav Ghosal had lost to Australian David Palmer 1-3 in the first round clash of the PSA men's event.
Ghosal lost 10-12 11-6 11-5 11-9 in 59 minutes in the USD 142,500 fourth PSA Super Series event of the year.
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