Home side substitute Soe Min Oo scored the only goal of the match in the 75th minute.
With today's loss, India ended the tournament on second position with six points from two wins -- against Chinese Taipei (2-1) and Guam (4-0).
Myanmar qualified for the final round of the AFC Challenge Cup, to be held next year in Maldives, after emerging as Group A toppers with seven points from two wins and a draw.
Thus, India still have a chance to qualify for the 2014 AFC Challenge Cup final round. They will have to wait till the end of this month, when all the qualifying round group matches are completed.
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The Group B and Group E qualifying round matches will be held at Bishkek in Kyrgyzstan and Manila (Philippines) later this month while the Group A, C and D matches were being played simultaneously.
Wim Koevermans' boys were no doubt the favourites to top the group and they were on course after beating Chinese Taipei and Guam. Myanmar were struggling and they were held to a 1-1 draw by Chinese Taipei, but they played their best match against India when it mattered most, to qualify for the final round.