Sania's nemesis turned out to be former doubles partner Shahar Peer, who rallied to hand the Indian a 6-7 (5) 6-3 6-1 defeat.
The 23rd seed Israeli capitalised on Sania's weak serve, breaking her seven times in a contest that lasted more than two hours. Sania committed as many as nine double faults and 49 unforced errors during the course of the game.
But there was good news for India in the men's doubles event as fourth seeds Leander Paes and Mahesh Bhupathi entered into the second round after getting the better of the Ukrainian-Spanish pair of Alexandr Dolgopolov and Albert Ramos 7-6 (8) 6-4.
They will next take on the winners of the match between the German-Dutch combination of Florian Mayer and Rogier Wassen and the French pair of Marc Gicquel and Gael Monfils.
In another men's doubles match, fifth seeds Rohan Bopanna and his Pakistani partner Aisam-Ul-Haq Qureshi defeated unseeded Americans -- Robby Ginepri and Rhyne Williams -- 6-1 2-6 6-2.
The ''Indo-Pak Express'' will now face the winners of the match between locals Travis Parrott and Bobby Reynolds and the American-German combine of James Cerretani and Philipp Marx.