In a high scoring match at the Jassim Bin Hamad Stadium Friday night, Ismaeel Abdulatif scored four times as Bahrain - who had Faouzi Aaish sent-off midway through the second-half - outclassed the 2008 AFC Challenge Cup winners in the Group C.
Gouramangi Singh and Sunil Chhetri managed to net the ball and Houghton was delighted that his players battled until the bitter end.
It was India's second successive loss in the tournament following the 0-4 thrashing against Australia in their opening encounter.
"It was a tough game. It's a tough group and it's a big challenge for us to play against opponents like ours. It was a good win for Bahrain. However, from our perspective we are the team who don't give up as in the second-half we had fight and when we scored a goal, we nearly added another and it could have been an interesting end for the game," said Houghton.
The 63-year-old Englishman underlined India's experience in the Asian Cup as an extremely positive experience.
"This tournament is good for us for two reasons," he added. "The first reason is that it shows that our federation and sports authorities need to step up and we need to have more infrastructure. The second one is that I believe it is good for the profile of football in India and it will be helped by this."
"Many people are watching the matches of the Asian Cup and playing against such teams as Australia and Bahrain is good for Indian football," he added.
Refusing to draw comparisons with the first match against Australia, Houghton said India created more chances against Bahrain.
"All games are different, and sometimes one style suits a game while it doesn't on the other hand," he said. "It's really difficult to make a comparison between the first match and the game today. However, we didn't create as many chances against Australia as we did today."
“We had good chances today but at the same time Bahrain scored five goals and they played 25 minutes with 10 men and so it was also a good performance by them."