The loss will put India in a difficult position to qualify from Group A as they face former champions Iran and Saudi Arabia in later fixtures. The top two in each group qualify for the quarterfinal stage.
India scored through Sanjeev Stalin (12th minute) and Boris Singh Thangjam (36th).
But UAE fought back twice to restore parity through Manea Aydh (35th) and Majid Rashid (53rd) before substitute Ahmad Fawzi scored the winner in the 74th minute.
India started positively as they made inroads at the opposition citadel in the first half with repeated forays and took the lead in the 12th minute.
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Following a free kick, defender Manea Aydh handled the ball off a Komal Thatal cross outside the box. Sanjeev Stalin curled the ball to the far post to find the roof of the net.
India continued to control the proceeding as they had more of the ball possession and came close to increase the lead in the 25th minute but Komal Thatal's try was saved by rival keeper.
But the UAE found the equaliser from the corner kick as Manea Aydh's header found the far corner of the Indian net as Dheeraj failed to clear the ball.
India retaliated and again took the lead in the next minute. A move on the left saw Aniket Anil Jadhav send a diagonal pass for Boris Singh Thangjam to find the roof of the net with a clinical finish to have India leading 2-1 at half time.
UAE scored the match-winner in the 74th minute through substitute Ahmad Fawzi to collect full points.
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